It is a fact that in today’s corporate space, in both the private and public sectors, businesses are no longer judged on size alone. In fact, this is no longer considered the main criteria say human capital management (HCM) and HR experts, because the reality is that any credible venture that has the resources, expertise and determination to stand its ground, can actually learn from others – irrespective of size. It is a lesson that small-to-medium and micro enterprises (SMMEs) have learnt very quickly.
James McKerrell, CEO of HCM and HR services specialist CRS Technologies, says that the local business environment has evolved, the traditional dynamics of large enterprises swallowing up market share and making it impossible for smaller operators to survive simply doesn’t apply.
“There are many markets and areas that reflect this … that show how smaller players are not only surviving, but are, in some instances, outdoing larger businesses,” says McKerrell. “Another dynamic is that partnerships are beginning to emerge involving all sized operators, that small and large businesses are working together in a symbiotic arrangement.”
The arrangement is based on mutual benefit and equal opportunity. As McKerrell explains, smaller operators can obviously leverage the credibility, influence, resources and opportunities that come with big business association – it is, in most cases, a package deal.
“Smaller businesses provide an input, either through manufacture or service or both, and an output in the form of sales, marketing and distribution function,” the CRS leader continues. “When this partnership works, the opportunities to trade, exchange and be responsible and reliable is bi-directional,”
But another reality of the market is that these types of relationships take time to forge, to grow and to materialise into something that is transparent and sustainable.
McKerrell says SMMEs need to be competitive, dynamic and service orientated and in pursuit of this, there is every possibility of larger organisations ‘leaning’ too heavily in the relationship, applying unnecessary pressure.
“Often cash flow comes into play in these spaces – big business determines payment terms and often stretches these, putting the SMME under huge pressure,” he says. “A powerful ally can be detrimental to the SMME, fixed prices and hard payment terms can bury a business.”
It is for this reason that McKerrell stresses the importance of open dialogue to be clear regarding expectations and undertakings – in addition to the need to avoid relying too quickly and too much on several large operators or just one. This will ensure that both parties benefit from the relationship.
While already large enterprises will benefit from exposure to the agility and flexibility normally inherent in smaller operators (and take advantage of the large base that smaller operators are operating from), the view of experts like McKerrell is that SMMEs can use transparent relationships with partners to grow and this equates to job creation and contribution to the economy.