Can we cross the hump and grow from small to large?

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SMEs

Last Friday, I was talking with a friend of mine who owns a paper manufacturing company. On Saturday, I attended a conference of Garment Exporters. There was data presented on how Garment Industry is stagnant in India while Exporters in other countries like Sri Lanka, Bangladesh and Vietnam are making merry by cornering all the growth in the market. There was also a presentation on a Sri Lankan company, that has grown to 2 Bn USD with hundred thousand employees in a segment that was new to Sri Lankan exporters, swim wear. It was an inspiring story and made me think on how come we in India have very few stories to tell. Why is that most founders of our companies are not able to break the glass ceiling and grow from small to big? The answer could be one or a mix of the following:

1. Proactive Leadership – Building a good company is also a vision. The founders of Google, Facebook or MAS holdings had a vision that went beyond market opportunities. Just like they pushed their employees into delivering high quality products, they worked to deliver a high-quality company/ companies. That is, companies where people had a purpose, people learnt from other companies and industries and had a quest to improve, to work towards perfection.
2. Flexible mindsets – The leaders need a flexible mindset to adopt change and technology. The assumptions that worked in yester years have to change. Instead of inward focussed, the founders and CEOs have to look outside the company and industry for inspirations and learnings.  Most importantly they have to change and lead the change. http://mentorsunlocked.com/business/getting-personal-about-change/
3. Win-win situations – Most medium sized business owners still operate with assumptions of past. They see their business as zero sum game where they would make more money only by reducing costs. This results in very transactional relationships with vendors and employees instead of creating an environment of co-operation and collaboration. It could be employees collaborating with each other or vendors collaborating with the company or the company collaborating with its customers. The biggest casualty in transactional relationships is lack of experimentation and hence innovations. For example, employees are hesitant to try new things, lest they fail or told that they are going beyond their brief.
4. Delegate and build teams – Most of the owners or founders of mid-sized companies are still hands-on. They are not able to make the transition from hands-on management to metrices driven management. Hence, they are not able to delegate and build teams, build a group of people who are empowered to take decisions, or who have high level of ownership etc, a group of people driven with purpose and not obeying commands.
5.  Walk the talk – Invest money in vision of company. A company that is growing and ever-changing needs money. Business owners have to plan their investments needs. They need to divide the profits in four pockets that is,
   1. Reinvestment
   1. Contingency fund
   1. Distribute it amongst stake holders
      1. Share holders
      1. Employees

While all other steps are not difficult, the first one is where the journey has to start from. The business owners have to think themselves as business leaders-people with a vision, instead of business owners. This belief will automatically help them develop a vision and rest all will follow.