SME Leaders Learn What’s Right For Their Business

The recent SME CEO Conference opened networking opportunities for small and medium businesses

Be it managing family and friends or creating a level playing field for all their employees, struggles faced by the chiefs of small and medium enterprises (SMEs) are unique in their own right – depending on the type of business.

Similarly, their sweet successes are also unique. But one thing is for sure; they are not alone in their entrepreneurial journey and this was a clear message during the recent inaugural SME CEO Conference 2017, organised by Leaderonomics.

Over 300 CEOs, managers, HR practitioners and businessmen who gathered at the conference had the valuable opportunity to network with other participating CEOs – sharing challenges, struggles, and victories with like-minded people.

Drawing inspiration from other CEOs and esteemed speakers, conference proved to be an insightful event, where business heads learnt how to take their SMEs to the next level.

Here are some nuggets of wisdom we gathered from the conference:

How to keep SME employees in the 21st century

Ninety-seven per cent of businesses in Malaysia are SMEs. This means that SMEs are essentially the backbone of the Malaysian economy.

Industries appear to be stuck at the Industry 2.0 level (mass production) instead of embracing Industry 4.0 (high-impact, technology-driven business practices). But how does one reach that level?

Human Resources Development Fund (HRDF) CE, Datuk Vignaesvaran Jeyandran, said in his keynote address that a recent study they had conducted found that employers were fearful that the people they hired would leave and join other companies after being upskilled or trained in a certain area.

Interestingly, their research also found that employees have other reasons to leave.
“Employees leave because they need to put food on the table.”

He then shared about the time he started working, earning RM1,500. At the time, buying a nice house would cost a few hundred thousand ringgit.

Fast forward to today, we have fresh graduates whose minimum income is only slightly higher than before, but with one major difference: a higher cost of living.

Graduates today struggle, and demand for higher pay, bringing into question their ability to survive on a small pay.

This is why HRDF believes in covering training costs – or making it claimable – rather than leaving it to employees to shoulder the burden.

Around 70% of Malaysians are not covered by any structured training funds or programmes and most of them are employees of SMEs.

With the right training, and genuine care for your employees needs and struggles, we believe they will not simply leave a company unless they are unfair practices and workplace issues that goes beyond remuneration or career growth. This is why SMEs ought to. . .

Invest into the culture of their organisation

Joseph Tan, expert on culture and CEO of Leaderonomics Good Monday, states that the top five reasons employees leave a company – according to a Gallup study – are as follows:

1. Relationship with the direct supervisor
2. Wrong job fit
3. Unfair practices and policies
4. Compensation and benefits
5. Vision and mission

While vision and values are great for an organisation to have, 70% of the results fell into the top two reasons: wrong job fit and relationship with the direct supervisor.

“Belief without believers does not lead to a great culture,” he shared in his session, Why SMEs Must Invest in Intentional Culture Design.

“Employees today want a purpose-driven and meaningful job. They want more than just to work for an organisation that’s only concerned with numbers. Many are looking for a place to belong.”

According to Gallup, when nothing is done about culture, 13% of employees are engaged, 63% are disengaged and 27% are actively disengaged.“Talented people cannot stand ambiguity,” Joseph said, explaining the 27% actively disengaged employees.

If there is no direction from above, employees are forced to find their own direction, which results in disengagement or ‘misalignment’ as HR departments may call it. Right rituals encourage right behaviour and right rituals may include team bonding, and truly listening to employees’ opinions and feedback.He concluded by sharing a story.

While having dinner with his daughter one day, he asked her, “How would you rate me as your father, on a scale of one to 10?” His daughter replied: “An eight, Dad.” Tan then bravely asked, “What would make it a 10?” and his daughter replied: “I wish you would play with me more.”

Tan’s conclusion was that while he had played the role of a father, he had not carried the soul of one. In the same way, we may play the role of a leader well, but not carry the soul of one. And, while it gets the work done, it doesn’t create a great workplace bond that will help employees feel belonged.

What stops your SME from greatness?

Many organisations complain that their biggest issue is with their people.

But according to Leaderonomics CEO Roshan Thiran, there are certain things that are constraining employees from working towards greatness.Here’s an interesting point: 70% of change or transformation plans fail not because of a lack of a good plan, but because of frustrated employees.

“Employees may seem to be frustrated with change (as your SME grows), but that’s not true. They are frustrated with constraints,” said Roshan.

Employees are constrained when:

1. Leaders are not clear

Roshan explained that clarity from a leader on vision, reality and mission, enables employees to understand the company’s current reality. The end goal and the means to get there are crucial to motivate and inspire employees.

2. The business model is not viable

Nokia once dominated the mobile industry. However, when Apple and Samsung penetrated the market with smartphones, Nokia eventually lost their market share due to an obsolete business model.
Roshan asserted: “When you want to scale. . . sometimes you must destroy your business model and reinvent a new one.”

3. When there aren’t proper systems and processes

When Jack Welch of General Electric (GE) realised that NBC’s (one of GE’s companies) leadership team was nonchalant about implementing the Six Sigma policy, he issued a circular stating that no one will be promoted unless they are Green Belt certified.

This change in policy motivated Roshan – who was then working at NBC – to not only attain a green belt, but a black belt!Roshan thereby concluded, “When you change your structure and policies, employees will suddenly be motivated.”

4. When they don’t believe in the company’s values

In the 1990s, New York was deemed dangerous by locals and tourists due to its high murder and crime rates. When a new mayor came in, he instructed police officers to paint the subway clean (of graffiti) and handcuff those who do not purchase tokens. Murder and violent crime cases dropped after that and suddenly, the city was safer even as population increased and tourism activities flourished.

Read this: The Broken Window Theory

What this tells us is when you change employees’ experiences, it alters their mindset towards something, and thus, their behaviour changes.As a leader, make the most of your daily interactions with employees to change your culture. Show them you care. Only then, will they care about your company.

Technology: Key growth factor for your company and employees

Amazon began as a start-up that sold books on the Internet. This was in the early 90s when the Internet era was beginning to take off in the United States. Now, the company generates a revenue of US$61bil and is the world’s largest online retailer! Why? Because of technology.

For SMEs to grow into MNCs, CEO of CourseNetworking Professor Ali Jafari said, “You have to design your growth and strategy around IT. But of course, it depends on the nature and the creativity of how technology is utilised.”

In reference to the latter, General Manager of Small and Medium Services and Partners, Microsoft Malaysia, Azizah Ali said in order to ride the waves of Industry 4.0, SMEs must prioritise certain areas of their business.

Among them are customer engagement efforts. This means looking at ways to service customers better using digital platforms, to provide more immediate and cost-effective service.

If you look at employee empowerment, explore ways to encourage collaboration and decision-making within teams through relevant software. Office 365 for instance enables content creation and sharing, provides private social networks, cloud-based machine learning, web conferencing and business analytics.

Another is optimising your operations by employing tools and software that simplify processes, thereby saving costs and enhancing productivity and output.

The last area is transforming your products. Azizah posed a question during the conference: “How do technology and competitors challenge your business model?”

She used Microsoft as an example where they initially put a lot of focus on licenses. Due to changes in the needs of customers and technology advancements, they shifted their focus towards enhancing business’ service delivery through Microsoft’s solutions.

In reference to growing your employees through the use of technology, this is where learning management systems (LMS) come in. As a cheaper alternative to traditional classroom training, employees can enter a virtual classroom and pick up specific skills that are required for them to do well in the company. Plus, the addition of social and gamification elements has made learning a lot more engaging.

So, knowing how to use technology creatively and using it to grow your people, would be key to scaling your SME while minimising expenses.

The power of branding comes from good storytelling

“People don’t buy what you do, they buy why you do it,” said Mark Schenk, advisor, coach and managing director of Anecdote International. He believes that relaying a good story is more effective than just trying to impress your clients or audience.

Sharing real-life experiences and results are more relatable as opposed to making assertions or general statements. When it comes to branding your organisation, it is important to remember that, “Authenticity is far more important than being impressive,” said Schenk in his session titled
Reinventing Your SME for Success: Storytelling and the Power of Brand adding that stories help make your brand stick. They help make you memorable.

Jump at the opportunity

Datuk Chang Khim Wah, CEO of Eco World, shared his experiences growing his company to be worth RM8bil in just four years. After a restart, Eco World managed to bounce back up in the market and create a name for themselves. Chang made two important points in his sharing session:

1. What may have worked last time, may not work as well today.
2. Trust your team, trust your instinct, and do your calculations.

“Anyone can produce a great brochure or market well, but to realistically deliver what you promise – that is the key that sets you apart from the rest,” Chang said in his session, How I Grew My Organisation to RM8 Billion in 4 Years.

It is important to be able to trust your team including the young. Chang said that 65% of their team is made up of Gen Y. “The young can provide fresh ideas while the older folks can provide stability,” he added.

In conclusion

A leader of an organisation can often feel alone facing issues no one else may understand. However, the conference had proven otherwise. The learning sessions brought a sense of unity amongst leaders to not only gain insight from each other but also a sense of comfort in knowing one isn’t alone and that there are other leaders out there who face similar struggles.Our esteemed panelists had amazing insights for CEOs who attended the conference.

Takeaways from participants of the conference

“I was reading the Leaderonomics paper on Saturday and saw the advertisement for this conference and I saw the speakers, and I was interested. What really caught my eye was the art of storytelling in business. Being in training profession, it’s important that I understand how storytelling is applied in all aspects, whether it is to build an SME or sole propriety or whatever.

I am here to network. There are lots of organisations here today, including HRDF, which is a major game player today in the training industry. No matter what, all courses are HRDF approved and the trainers need to be certified. I am not HRDF-certified, so that’s why I’m here to find out if there’s a way to do so.

̶ Shanty Jeyabalan, independent learning consultant, coach and trainer.

HRDF has given me the opportunity to attend this conference and I’m really eager to hear the speakers lined up today. I have attended several programmes conducted by HRDF prior to this. I think this is the highest level programme which they have offered me, whereby all the top-notch CEOs are gathered at one venue to share their insights. I’m hoping to bring back with me some valuable knowledge.
̶ Tamil Selvi, managing director, Prima Kaliani Sdn Bhd

Conference as such are great because I get to learn from the big boys because they’ve done it for a while now and their knowledge can be applied to our own business. Also, there’s the opportunity to network as well. My biggest takeaway is that people are important. That you have to keep your employees engaged, and only then will your customers be engaged as well.
̶ Syakirin Rosik, founder, VOWS, online clothing and jewelry line

Pearls of wisdom from SME CEO Conference speakers

The SME CEO Conference had a panel of esteemed speakers and panellists representing various industries in Malaysia such as media, telecommunications, recruitment, IT, digital marketing, property and skills training. Here are some valuable pearls of wisdom gathered from these experts.

“Invest in your people. Be it the readiness for them or the productivity tools to actually really enable them. You must make sure you leverage on your resources.”
̶ Azizah Ali, GM of Small and Medium Services and Partners, Microsoft Malaysia

“Growing the people is better than growing the business. When you grow the people, the people will grow the business. . .SME leaders shouldn’t view themselves as bosses but instead as leaders. Because a leader enables team work and is hands on.” —Gopi Ganesalingam, CEO and former founder of LavaProtocols and VP of enterprise development MDEC

“Change begins from the top and trickles down. And that takes time. . .How connected is your senior management to the lower level? If you can bridge that gap, you will keep your staff.” —Lee Lung Nien, CEO of Citibank Berhad

“Anyone can produce a great brochure or market well but to realistically deliver what you
promise, that is the key that sets you apart from the rest.”
—Mark Schenk, MD of Anecdote International Pty Ltd

“Continuous engagement with the customer is important. . .Spending time on the ground with customers.” —Albern Murthy, CEO of Digi

“Is your company your ATM or your stand? I’ve started companies that are ATMs, but they never really satisfied me. MindValley is not a company. It’s my stand. I stand for reforming global education and human unity. . . So when you make your company your stand, it gives you superpowers to withstand any adversity.”
̶ Vishen Lakhiani, CEO of MindValley

“When we started out, we didn’t know the business. We didn’t come from the HR space and so all that we learned was through conversations with customers. Customers helped shape our direction and our choices and build a great product.”
—Suresh Thiru, CEO of SEEK Asia (jobDB and JobStreet)

“I spent four years in Jobstreet and I was actually still figuring out what I was good at. . . .A relevant lesson for me was that there are different courses (paths) for different people.”
—Malek Ali, CEO of BFM

The 2017 SME CEO conference observed a turnout of over 300 attendees, with MDEC, Microsoft, HRDF and Alliance Bank as the event’s sponsors. Some of the key highlights of the entire conference were the panel discussions which featured CEOs from successful companies (both SMEs and MNCs).

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