How SMEs Can Thrive After COVID

All industries and sectors have felt the ripple effects of COVID-19 but SMEs in South Africa have especially been impacted causing consolidation in turnover and sentiment. 

These vital entities are the beating heart of the South African economy and play a vital role - employing almost 60-80% of the total workforce!

 Needless to say, the heart of many economies often experience oxygen shortages during recessions due to short runways on capital & cash reserves, a small client base and in general less resilience to tolerating risk in crisis times.

Below I cover areas that SMEs can focus on in order to re-align successfully for thriving in a digital economy.

As soon as the lockdown hit South Africa, businesses were gearing up for survival as the rating agencies downgraded the economy; if that wasn't enough the lack of stable power supply in the country is yet to convince investors and placed quite a damper on growth.

According to the Financial Times, 61% of South Africans reported a loss of income due to Covid...

 SMEs in SA Has Faced Many Barriers To Entry And Lack Of Support:

• Creditors are pulling back and liquidity has dried up
• Small businesses have a lack of financial awareness and education
• General lack of access to financing 
• Uncertainty about demand and a slowing of market expansions 
• Conflicts and strains on morale make managing people a challenge

With so much of core foundational revenues resting in mere handfuls of fragile baskets - the next steps are vital to establishing a viable future in the next normal.

What Are The Next Steps For Businesses In South Africa? 

In Dealing with crises there are a couple of overarching foundational blocks that position thriving entities sustainably. These are embodied by thriving businesses that survive culling from the herd. In a nutshell, those that seem to grow despite these challenges all focus on stable cash flow & finance, clarity about their market, strong and stable operations and supply chain, frontline excellence and great culture with strategy alignment in all layers.

Inclusivity of these 5 functions are key to surviving in the post-covid economy:

 1. Digital Strategy

Short-term behaviors are becoming long-term preferences. 

It is crucial for companies to have a strong digital strategy that addresses the behavioral changes in the economy and provides sustainable support for internal and external stakeholders. Reimagining and translating key objectives into strategies build competitive advantages that make all the difference.

 2. Technology & Platforms

Platforms are a foundational backbone to sustainable business in the 4th industrial revolution.

Building digital platform ecosystems are crucial to successful digital transformation. Re-igniting these platforms strategically and in different stages are key, especially in supply chain. Focussing first on a smaller subset, function or segment of the organization will enable greater control over parameters to gear up for when the flywheel starts spinning. Begin with isolated components of value propositions and scale from there.

3. Leadership & Alignment

During crises strong leadership is imperative.

Communicating and ensuring alignment on all levels enables forward-moving capabilities that unlock development and growth. 

The remote working factor creates a great opportunity for innovative approaches to meet such needs in the new norm and flat organizational structures are also a key to survival in such environments.

4. People & Culture

 Thinking about your employees, customers, investors and partners is important. Make sure all stakeholders have what they need and factors such as safety should be incorporated with high priority across all levels. 

With growth in mind, scaling can often be bottlenecked by a lack of cultural alignment and skills internally. Addressing the growing need to align and build capabilities with changing phases enables leaders to unlock more time for strategy and new business. 

5. Process & Efficiency 

Driving operational efficiencies amidst volatility is crucial to restarting. 

Review processes...

All of them in order to pinpoint areas that could be restricting growth. From operations to manufacturing make sure your processes enable competitiveness. 

This gears an organization up for capacity in a fast-paced environment. Having clear control over KPIs and key actions will eliminate waste and highlight bottlenecks - allowing for optimizations.

 In Closing

The new digital economy has great opportunities. 

Laying strong foundations for success in a new era should be the main focus point, merely trying to cushion a crisis is not the sustainable approach - crisis management does not have to be complicated.

If any business will recover to a winning position - embodying change at a foundational level is key; not only will this empower SMEs themselves;

But will cause keystone changes that facilitate growth and opportunity across the entire economy.