In todays global and dynamic marketplace, consumers exert significantly greater control over the entrepreneurs decision than ever before.
Shifts in consumer behaviour, including unprecedented access to information, a greater choice of goods and services, and refined expression of individual preferences have diminished the efficiency of traditional research and development.
In response, Business-to-Business and Business-to-Consumer companies alike now need to drive growth through corporate initiative based on research. This approach balances operational efficiency, service excellence and bottom-line management for top-line growth. Moreover, for the business to grow, it needs to access various professional services and advice that specifically addresses the needs of the level its at.
Medium sized companies need an ecosystem in which they can grow with the support of research, appropriate training and relevant professional services.
Looking at recent studies in the international arena as well as listening to Kenyan businessmen who are a step ahead of their peers, indicates that a medium sized company is at a point where it needs to look at the following critical differentiators:
First is to know your customer: Much has been written and said about this but it cannot be overemphasized. An entrepreneur seeking, not just to remain relevant but to have a competitive edge need to know the target client very well. This means going out there to study their behaviour, their social pattern, their psychology and financial pattern. One cannot help but admire businesses that have managed to get this right! How easy it then becomes to refine your product or service to the clients needs, Moreover, when you come across new ideas in your travels, it becomes easy to use what is relevant and modify according to the peculiar need of your client.
Another key differentiator is human resource management. At this level, the business is getting too big for the owner to do everything and do it well. The entrepreneur at this point needs to move away from running operations and focus more on infusing his/her vision into the employees. Employing the cheapest labour may turn out expensive for your business. The entrepreneur may want to look at various ways of attracting top talent in the critical functions of his business. Some owners of business opt to offer shares to such critical talent so as to lock them in and to keep them fully engaged and focused on growing the business.
Further to this, the middle level management becomes critical since these are the link between the owner and the employees. It would be futile for an energetic entrepreneur who is passionate and visionary in his line of business to have a team of middle managers who are just in the company to gain skills for the next job. It is worth at this point to think of a suitable incentive plan for the middle level managers so you can attract and retain the very best. As the leader in the organization, spend a fair amount of your time with this part of your staff so you can transfer your energy and enthusiasm for the business to them.
Capital and how to raise it, cannot be overlooked at this point in your business. I was listening recently to Mike Macharia of Seven Seas Technologies, who as an alumnus of Strathmore Business School was invited to facilitate a session for Owner Managers from Kenya and Nigeria. He posed a question to them which every entrepreneur running a midsized company may want to think about. Are you in business to build a business or are you in it to build a lifestyle. This question if answered with all sincerity may be the underlying reason for several decisions made by the entrepreneur in sourcing for capital. From that sample of entrepreneurs listening to Macharia, it seems that culture plays a major role in the answering of this question. It seems that for many Kenyans their business is for lifestyle. They are attached to the business and are not at times ready to share it with anyone. They therefore prefer to source their capital from personal and family savings as well as from banks. Their Nigerian counterparts seem more open to private equity as long as they have the knowledge necessary to negotiate appropriately. It is probably necessary for an entrepreneur who has built the business thus far to think long term and be able to separate his/her personal vision from the vision he/she has for the business. There is also room here for a lot of learning so as to make the right decision at this point.
How about the governance structures of the business? This is a must think about for a midsized company. In order to scale the business to the next level, the business needs a strong leadership base. An entrepreneur many need to think of a well constituted board, a management team and reporting and accountability systems. This give the business more credibility and objectivity in the decision making process.
As an entrepreneur, reflect often on the fact that the continent is depending on you for its economic growth and that many young people are looking up to you to create jobs for them or mentor them to take on businesses. There is therefore no room for mediocrity; nor for staying in the comfort zone. It is good that you have build your business to this level; you have what it takes to move it from good to great. Seek the knowledge and the partnerships you need to get this done. It is also worthwhile to seek the support of a coach or mentor in order to achieve the right mindset. Our continent is rich in natural resources and human potential. All we need are visionary business leaders who can maximise on these resources for the good of its inhabitants and future generations!
Strathmore Business School