I now call my clients 'Small Medium Enterprises,' or SMEs. I take some grind for it, too; evidently, some people think the term SME pretentious, like I'm afraid to call a small business a small business. Believe me, this is not the case. I know what a small business is, and it's not an SME. The difference is simple. The SME is innovative, challenging the market with novel ideas, from product and service offerings to markets and channels. The small business is in the mix with the rest of the their market. Take a look at the yellow pages and there they are, line after line - you choose the category, landscaping, window repair, asbestos removal, etc. The SME is nimble, quick and clever. They seek new opportunites and move decisively to exploit them. Many of them are under 50 employees, but they are global in their thinking and in their physical presence. The are the hub of a network of manufacturers, distributors, logistic carriers and customers. They carry new ideas from the University labs into the mainstream market. They negotiate, broker and deliver. They use advanced telecomm and computing services, centered around the internet cloud. I believe the business future belongs to the SME. Now I know that my blogger colleagues disagree with me, and I must admit that they have the stronger argument today. When you look at the consolidation of so many industries and service sectors it is very easy to conclude that big is best. But the consolidation we have all seen portends the end of the gargantuan business, not its finest hour. Big business is now much like small business: No innovation, just another line in the Yellow Pages. Without innovation only one strategy remains, and that's sucking all the oxygen out of the room. So they merge and acquire just to remove the competition. And instead of innovating, they spend most of their time on digestion, trying to make the several companies into one. Meanwhile the SMEs are in the hunt, bringing new networks of relationships to market. It's not as sexy as FaceBook or MySpace, but these companies hunt in packs - networks of similar companies all driven by the same entrepreneurial values. Big companies used to dominate the landscape, but with technological changes, including the introduction of the internet, the SME challenges the competition at every turn. It's not going to happen overnight, but slowly, one product or service at a time. Office products, kitchen utensils, toys, laboratory intruments. Am I right that the SME is growing in numbers and strength in the market? One interesting trend is the new interest in serving these companies. Take the B2B software market. Where's the excitement today? In software products and services for the SME. Highly distributed software applications, like NetSuite for example, enable a small, global enterprise to operate, literally, in a few days after purchase; at least the skeleton can be up and running. 25 employees in 15 different locations, not a problem. In some markets the changes are coming quickly. Publishing of both words and music is devolving away from the large corporations that once dominated to smaller units, even individuals in some cases. Yesterday, the Wall Stret Journal published a fascinating article, or obituary, on Wal Mart that's a must read for every business person or student. Like I said, it's the beginning of the end. |
