From a recent article (this post is not about that article, or what is right or wrong in the article…) – “One of the primary issues within the country’s SME sector is a simple lack of experience”. This got me thinking. In SA there are only two metrics to legally determine the size of a business: the number of Employees (Full-time Paid employees, or the equivalent of Full-time Paid employees), and Total Annual Turnover.
The ceiling for employees is uniform across all companies, regardless of the sector they trade in. Micro enterprises can have a maximum of 10 employees, Small Businesses must have between 10 and 50 employees, and Medium-sized enterprises can have up to 250 employees.
Turnover ceilings range from R220 million to <R5 million.
Given the above, what is or could be meant by experience? Two online definitions that I like are –
“the fact or state of having been affected by or gained knowledge through direct observation or participation. : practical knowledge, skill, or practice derived from direct observation of or participation in events or in a particular activity.”
“knowledge or skill in a particular job or activity, which you have gained because you have done that job or activity for a long time”.
Experience comes from “doing”.
And experience in what, or which areas of business?
The primary areas of business can be summarised as follows, no matter the size and industry of the business, or whether for profit or not:
- Vision, Mission and Purpose;
- Implementation, and continuous fine-tuning of the above;
- People;
- Time;
- Money;
- Ongoing reviewing of the need to Exit & Entry of current products and services, and associated strategies.
Experience is required in all these areas. And remember, experience comes from “doing”.
From the same article – “A thorough analysis of existing programmes needs to be conducted to provide further insight on where the successes, shortcomings and failures of existing SME and entrepreneurship development programmes are, as well as how these can be improved upon or completely avoided.”
And,
“The South African SME development ecosystem that is bottom heavy and focused on new businesses lacks a localised body of knowledge, competencies and infrastructure to support these growing but struggling businesses.”
A reminder – this post is not about that article, or what is right or wrong in the article …
Long before education as we know it today – schools, universities, business schools, localised bodies of knowledge, etc. – existed, we had businesses. And yes, the world has changed, but the fundamentals of, and doing business has not and will not.
Running a business has always included the same four fundamental things, and again, no matter the size and industry of the business, or whether for profit or not:
- Risk taken by the owner/s;
- Making a difference in another’s life, solving a problem;
- In a unique way;
- That separates you from your competition.
A clever person once said something along – the surest sign of insanity is doing the same things over and over, expecting a different result.
As businesses grow, the knowledge ceiling of the founders become a challenge, an “insanity”.
More staff leads to a change in culture, and therefor a requirement in management styles, or the risk arises of another “insanity”.
More products require different manufacturing and operations systems and processes. Else again, the risk arises of more “insanity”.
Moving from the “A” league to the Premier League, requires different strategies, not a repeat of “it’s worked so far” or “it’s what got us here”. More “insanity”.
If it was as easy as going to school, university, business schools, and localised bodies of knowledge, we would not be having these discussions. And thousands of “business” books won’t have to be written every year.
Our clients vary from R1mio to R400mio in Annual Turnover, and they all have challenges – positive and negative – in the above four fundamentals. And they always will. That’s life. But when a Business Owner is not aware of their own knowledge ceiling, no university, business school, and localised body of knowledge, will help.
Many of us know that we don’t know what we don’t know. And that the only way to get to know what we don’t know, is to step out of our comfort zones and surround ourselves with others that can see what we don’t know – identify the experience we don’t have.
There are only two ways to get experience:
- Do it yourself – this needs time, and;
- Spend time with those that have done it, get their advice, and support in the primary areas of business.
The latter is what we do at The Alternative Board®.
25 countries.
Since 1992.
More than 28 000 Businesses.
It’s time to get rid of your knowledge ceiling, out of your comfort zone, and in the company of those that have done it.
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