Today is world MSME day. According to the latest ASBFEO report, the economic contribution of small business to the Australian economy has topped half a trillion dollars. The value of small business to the economy surged by 15 per cent in 2021-22 to $506 billion and accounts for one-third of Australia’s GDP.
The report also shows that Australia’s 2.5 million small businesses provide jobs for 5.1 million people and employ 42% of all apprentices and trainees in training – nearly double the amount supported by a big business. Almost 98% of businesses in Australia are small businesses.
An equally timely and compelling article by McKinsey provides insights from a comprehensive study, which spell out 10 key shifts any business faces in the current environment:
- Purpose and Leadership: Define a clear purpose that aligns with the values of your SME and communicate it effectively to inspire employees. Develop strong leadership that champions the purpose and fosters a culture of engagement and innovation.
- Networked Organizations: Embrace collaboration and partnerships with external stakeholders, including suppliers, customers, and industry peers. Leverage technology to facilitate efficient communication and information sharing.
- Trust and Transparency: Cultivate an environment of trust by being transparent in decision-making processes and communicating openly with employees, customers, and other stakeholders. Develop and implement clear policies and procedures to build credibility and demonstrate integrity.
- Talent and Skills: Invest in attracting and retaining top talent with competitive compensation, professional development opportunities, and a supportive work environment. Emphasize the importance of upskilling, multiskilling and reskilling to adapt to changing market demands.
- Ecosystems and Platforms: Identify opportunities to leverage ecosystems and digital platforms that can expand your SME’s reach, facilitate collaboration, and create new business models. Stay updated on emerging technologies and industry trends.
- Agility and Adaptability: Foster a culture of agility and adaptability within your business. Encourage experimentation, rapid decision-making, and flexibility in responding to market changes. Continuously assess and adjust strategies and processes.
- Customer Centricity: Place customers at the heart of your business. Invest in understanding their needs, preferences, and pain points. Leverage customer feedback and data analytics to drive product/service innovation and enhance the overall customer experience.
- Digital Transformation: Embrace digital technologies to streamline operations, improve efficiency, and enhance customer engagement. Invest in robust cybersecurity measures and stay vigilant against potential threats.
- Sustainable Practices: Integrate sustainability into your SME’s operations and strategy. Implement environmentally friendly practices, social responsibility initiatives, and ethical business conduct. Communicate your commitment to sustainability to attract conscious customers and partners.
- Resilience and Risk Management: Identify and assess potential risks to your SME’s success, including economic, operational, safety and reputational risks. Develop comprehensive risk management strategies that involve proactive planning, contingency plans, and regular monitoring. Typically, this is done via careful strategy development and progress tracking.
Summary of approaches for dealing with the 10 Shifts:
- Clearly articulate your SME’s purpose, aligning it with the values of your employees and stakeholders.
- Foster collaboration and partnerships with external stakeholders, leveraging technology for efficient communication.
- Build trust through transparency, open communication, and clear policies and procedures.
- Invest in attracting and developing top talent, emphasizing upskilling and reskilling.
- Explore opportunities in ecosystems and digital platforms to expand your SME’s reach.
- Cultivate agility, adaptability, and a culture of continuous learning within your SME.
- Prioritize customer centricity by understanding their needs and leveraging feedback and data analytics.
- Embrace digital transformation to streamline operations and enhance customer engagement.
- Integrate sustainability practices into your MSME’s operations and communicate your commitment.
- Develop comprehensive risk management strategies to ensure resilience and minimize potential risks.
By addressing these shifts strategically, you can position your MSME business for revenue growth, relevance, innovation, and long-term success in an evolving business landscape.