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 K Subramanian - Director, Drawing Board 

 
Date of Publish - Wednesday, 7th March 2018

"Every decade is characterized by unique business revolutions. This decade belongs to e-commerce, fintech, startups & VC firms"

What can an SME learn from an MNC to scale up?

India is undergoing a startup revolution. Every decade is characterized by unique business revolution and this decade belongs to e-commerce, fin-tech, startups & VC firms. The business journals and dailies are busy and never tired of covering news from startups / SME owing to their valuation, attracting investments, flight of human capital, technological breakthrough and innovations. This pace of Indian revolution augurs well for the country and it has come at an important time when successful SME’s are fuelling their vision to become more successful. As an SME grows, it reaches an important intersection of being successful yet unable to scale up.

"As an SME grows, it reaches an important intersection of being successful yet unable to scale up"

At this stage, SME would do well to learn from successful Indian firms, MNC and embrace it thereafter. Successful companies follow three principles in their journey to becoming successful.

Many SME go through this phase of wanting to scale up and they can learn a lot from successful Indian companies and MNC. “Scaling up” is often referred to replicating the business model across geographies or introducing more variants in their core product offering.

The first principle is to “Invest in the Blue Book”. The Blue Book captures their operation guidelines and governing principles of the business. It encompasses “What is their Lead Generation Process, Sales Funnel and Management Process, Distribution Strength and what makes it strong, how to manage inventory, Working Capital Rules, Sourcing & Supply Chain, HR, Talent Management, Policies that govern their operations, Finance, Values etc.”.

This Blue Book captures the collective wisdom of their journey in becoming successful and is often embellished from time to time to reflect changes. But this would be the Holy Grail of the company.

The second principle is to “Invest in Automation”. It makes the business management efficient, process driven and brings in controls and compliance. The automation would largely be in the areas of Sales Operations, Finance and Manufacturing / Sourcing.

Once the above two principles are achieved, the third principle is “Invest in Talent”. This is the third critical piece for scaling up. Often entrepreneurs from SME overestimate themselves and take up operations. Being successful as an entrepreneur is different from being successful in running a company. Entrepreneurship success comes from converting an idea / untapped demand it into a business opportunity and monetizing it. However, managing operations is micro management and has executional excellence as the core operating principle.
Successful companies are run by professionals with an entrepreneurial mindset and passion, who are empowered and mentored.

If we analyze successful companies, they would always call themselves professionally run. This refers to having a process driven approach, automation to eliminate chaos and a professional culture that
nurtures talent and values empowerment. While there are several other important learnings, these three are the most common ingredients for scaling up.

"If we analyze successful companies, they would always call themselves professionally run."

Author :
Karunakara M Reddy
 

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