“The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” — Rupert Murdoch
In mid-July this year, the government announced a ban on expanded polystyrene packaging, commonly known as kaylite. Industry that uses kaylites, most notably fast food outlets, quickly screamed over the ban, saying it would harm their operations. The Environmental Management Authority put the reason for the ban on the material’s effect on the environment. Polystyrene is very slow to biodegrade and has been a focus of controversy among environmentalists globally for years. Worldwide the material is increasingly abundant as a form of litter in the outdoor environment, polluting both lands and oceans.
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The government listened to the outcries of kaylite packaging users and gave them three months to find alternative forms of packaging. Just a week after the ban announcement, I visited one food store and guess what they were using as packaging? Clear plastic containers with the “recyclable” symbol at the bottom, meaning it would not be a mess to the environment like kaylite, which is not recyclable. And the supplier was a small local company. Somebody had spotted an opportunity and quickly rushed to start making this alternative to kaylite food containers. That is the spirit of a true entrepreneur, quick to spot opportunities and grab them.
The 20th century was dominated by big companies. Spurred on by the advantages arising from economies of scale and more affordable transportation in the form of railways and seaways, firms grew and merged, built huge mass production factories and produced goods in gigantic quantities. Many of the huge brands are still in existence today, but some faltered and disappeared. Others were bought by other firms. The main reason for the failure of big firms was their inability to move fast. They could not grab opportunities fast enough.
Kodak filed a patent for one of the first digital cameras back in 1977. However, seeing that their film business was bringing in so much money, they did not introduce digital technology to the public at the time. It continued to focus on traditional film cameras even when it was clear the market was going digital. When it finally decided to get into the digital market, it struggled to gain market share against other manufacturers who had gone digital years back . Stories of blunders like this are plenty.
Now, if you are running or building a small business, you have the advantage of being able to move and change course quickly. You can develop new products and introduce them into the market faster than big firms which need months for executives and boards to make decisions. To effectively enjoy the advantages of being small, you need to be always on the lookout for opportunities. Whenever a problem arises, it presents an opportunity for an entrepreneur to provide a solution, at a profit of course. How many new products or services have you developed in the past five years to solve a pertinent problem? If you have not developed at least one new product or service, beware of being left behind as your competitors are working hard doing so.
The retail business in Zimbabwe tells an interesting story. Two decades ago department stores and large, classy retailers were the leading players in the sale of clothing and groceries. However, as the economy turned south, the growing retailers of clothing and groceries are clearly informal traders and small shops scattered all over city centres and residential areas. Many manufacturers have noticed the shift and are now supplying their products directly to informal traders on the streets. Small businesses have been doing this for years, as they had the advantage of being closer to their customers.
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Being smaller clearly has the advantage of closer contact with customers. Recently, the founder and CEO of fledgling American electric car manufacturer Tesla made headlines in business forums. A customer made a complaint on social platform Twitter and Elon Musk responded in 24 minutes. The customer wrote: 19 August @elonmusk can you guys program the car once in park to move back the seat and the steering wheel? Steering wheel is wearing.
Twenty four minutes later, Tesla CEO Elon Musk twitted: Good point. We will add that to all cars in one of the upcoming software releases.”
Would you expect that from any CEO of a big company? As an SME owner, do you take time to listen and act on customer complaints and suggestions? If you are not close to customers and do not know what they think or feel about your products and services, you run the risk of losing them to more astute and customer focused businesses. Make your company available on social media and take customer feedback seriously. These are not the times for excuses, shifting blame or ignoring customer queries. Act as soon as you can to reassure customers before you lose them. The ability to respond fast is one that small and growing businesses have over old, big businesses.
Many of the fastest growing firms of today started out small, moved fast and grew quickly due to being innovative, spotting opportunities and moving fast to act on them. You can do the same by taking advantage of the changing environment to capture new markets and beat the slow movers.
Until next time, keep on accelerating your growth.
Phillip Chichoni is a business development consultant who works with SMEs and entrepreneurs. His new book Business Survival and Growth Amidst Turbulence is now available. You may contact him by email, chichonip@gmail.com. You can also visit his blog http://chichonip.wordpress.com
