Transforming our SMEs into giant slayers
YEAR 2016 could be described as the year of the underdogs. We saw the triumph of Brexit and Donald Trump despite polls indicating that they were the underdogs. Leicester City Football Club won the 2015-16 English Premier League, a victory described by the press as the greatest sporting upset ever. Joseph Schooling won Singapore's first ever gold in the 100 metre butterfly event, beating his childhood hero and the most decorated Olympian of all time, Michael Phelps.
In the corporate world, small and medium enterprises (SMEs) are generally perceived as underdogs compared to the corporate giants. But thanks to globalisation and the Internet, the playing field has been levelled for the SMEs and opportunities abound. However, the window of opportunity is becomingly smaller given intense competition.
According to some studies, it took 75 years for the telephone to reach a critical mass of 50 million users; 38 years for the radio; 13 years for TV; four years for the Internet; three years for the iPod and 35 days for Angry Bird. In the past decade, the rate of adoption of new technologies has accelerated the increasing connectivity to millions globally.
This means that if an SME has a good business product or service, it can quickly reach out to the market, and cheaply too. Many previously unknown and small players such as Amazon, Paypal, Facebook, Uber and Airbnb have capitalised on innovative and disruptive technologies to gain global dominance. To ride on these opportunities and pursue sustained growth, our SMEs will need a new mindset to embrace new business models and adopt new ways of doing things.
In order to manage changes arising from technological disruptions, SMEs may wish to draw inspiration from the lessons that can be learnt from the David and Goliath story. In fact, one can take away precious gems of business wisdom from this story and these can be distilled into the following eight lessons:
Lesson 1: Changing the negative mindset
In the story, thousands of soldiers from Israel cowered in fear and no one dared to fight the giant Goliath, the Philistine warrior who had been cursing and challenging Israel for 40 days. In truth, the real enemy was from within. David managed to overcome the fear of the unknown, "negative" noises and pessimism so that his resolve to fight and annihilate Goliath was unhindered. From the corporate perspective, "Goliath" is the negative mindset of some SMEs towards change and transformation.
Lesson 2: Saying 'no' to the establishment
Most of us in the corporate world dutifully follow the instructions of our bosses and established systems without demur. In this story, the brave David declined King Saul's offer of weaponry, tunic, armour and helmet as they hindered his agility. Instead, David would do it his own way. The takeaway here is clear - there may be times when following the establishment and toeing the conventional line are not the wisest moves. Stand firm on your conviction if you think your ideas will better serve the corporate interest.
Lesson 3: Using innovative tools
David had in his possession a slingshot and five stones. Goliath did not realise the stunningly fatal power that could be unleashed by this deceptively simple tool. Likewise, the big players in hospitality and taxi transportation were caught off-guard by the game-changing capabilities of Airbnb and Uber with their simple app-based business models.
Lesson 4: Capitalising on productivity
Productivity does not necessarily entail the use of clunky or seemingly impressive tools. David's slingshot was a tool of high productivity as he had adeptly used it to protect his sheep from the lions and bears. With practice, he became very good at using the slingshot. Similarly, SMEs need to harness the power of relevant and state-of-the-art tools and methods that can raise their productivity level.
Lesson 5: Finding the market niche
The savvy David was able to identify a weakness in the arrogant Goliath, who did not bother to shield his forehead. Thus, David was able to hit this unprotected spot. In the same way, corporate giants tend to be complacent, relying on past achievements and neglecting to correct their weaknesses. Smaller players which are nimble and astute enough in identifying niche markets, gaps and weaknesses of the corporate giants will be better positioned to expand their business footprints.
Lesson 6: Acting swiftly
David marched quickly into the battlefield and struck Goliath's forehead with a stone from his slingshot. After knocking out Goliath, David swiftly ran towards him and took Goliath's sword to cut off the latter's head. Similarly, in the business world, speed and decisiveness are of the essence in making inroads into new market niches or establishing market leadership.
Lesson 7: Dying by its old business model and culture
Goliath died by his own sword. Likewise, the demise of corporate Goliaths such as Kodak, Borders and Nokia could be attributed to their obsolete corporate cultures and business models.
Lesson 8: Collaborating with others
After Goliath was beheaded by David, the Israelites were able to follow through to pursue the enemy and gained victory. David could not have defeated the rest of Goliath's army on his own. He needed his fellow Israelites to finish up the job.
Similarly, our SMEs need to internationalise because our domestic market is too small. They should consider teaming up with other SMEs and hunt as a pack. This is because in the international arena, our SMEs will be competing against global giants and in unfamiliar grounds.
Clearly, the simple David and Goliath story offers quite a few business-related insights for Singapore's SMEs to overcome their inertia in adopting new initiatives to transform and innovate their business models.
They need to identify and move swiftly into new market niches in an increasingly competitive and complex marketplace. Switching to the use of appropriate technology such as automation and digitisation will enable them to increase their productivity. They also need to collaborate with one another to reach global markets.
