In a well-known survey by American Express (AMEX), 67 percent of Small and Medium Enterprise (SME) Chief Financial Officers (CFOs) of 151 firms surveyed in Singapore felt that their businesses have a moderate to significant risk of failure in the next three to five years. That is a shocking statistic, we don’t often consider that so many SMEs are feeling so negative about their future. And this is just in Singapore. What about the rest of the world? And especially in times of crisis such as the turmoil caused by the the COVID-19 pandemic?
The key concerns which the CFOs named included tight labour and new government regulations, as well as volatility, changing economy and disruption from technology. No one wants to fail. These SMEs are searching for tools, data, and insights to help them make strategic and risk management decisions to be future-ready and be the firm that is succeeding, not the one following this trend and failing.
Every business owner sooner or later realises that the ability to do their job well in the past is not enough to run a successful and growing business in the future. They need to transform their businesses in the new operating environments.
When transforming and scaling businesses, they require professional management skills including people and team development capabilities, finance and cash flow management and the ability to design an effective Operating Model. These are often skills that an average business owner doesn’t have.
They need professional help but generally, cannot afford to employ a full-time professional to run these functions or to employ expensive consultancy services.
This is where business coaching can contribute a significant role in helping these kinds of SMEs to continue their STRATEGY JOURNEY. In this blog I want to look at how business coaching for SMEs can be part of their Strategy Journey as I believe that without a framework this kind business coaching is far less effective.
What is Business Coaching?
Business coaching is a process during which a business coach provides guidance and support to small and medium-sized business owners with a goal to improve their profits and sales growth. It also helps them to strengthen their overall business capabilities such as people and team development, operating model efficiency and marketing ability beyond their home territory.
In order for business coaching to be successful, the quality of the coach-client relationship must be on the highest level of trust, honesty and mutual understanding. Not only in terms of methods but also with an approach to support the philosophy of the business in general.
Business coaching is the type of relationship in which compatibility of parties involved is necessary for success. For this reason, there is no simple formula when it comes to choosing the right business coach.
In addition to the experience and the wisdom of the business coach, he/she should bring along with him/her a structured business framework and methodology that can help the SME to transform and learn during the process of the coaching relationship.
THE STRATEGY JOURNEY is one proven business framework that can be used by the business coach in helping SME owners in their transformation.
When I met lead author Julie Choo and discovered her framework, I knew I had to be a part of it all and join her community and team as a co-creator and contributor to show how I think it works in the coaching context. As a coach with over 30 years experience coaching clients from all over the world and especially in Asia and having previously run my own businesses before exiting, I wished I had a structured framework to use, that was so comprehensive. I had many of my own methodologies or others that I had learnt and used over the years, but this one just covers it all and really bridges that gap the others just could fulfil in one single framework.
From the Mission Model through the Operating Model to the Transformation Model and beyond, having a framework within which to work gives both the coach and client a way to work together as a team towards shared goals. This is just as crucial to the coaching relationship as it is to the culture within the business.
Difference between coaching and consulting
Many small business owners do not know the difference between a business coach and a consultant. This also means that they themselves don’t know which one they actually need for their business.
A business coach or partner will:
- Leverage your strengths and bring out your best potential
- Support you in developing your vision and direction for the business
- Help you overcome your limiting beliefs and fear when working on new ideas
- Help you to explore options and solutions when confronted with business issues
- Provide support and hold you accountable in executing your action plan
A business consultant will:
- Be an expert with deep business skills and specialization
- Develop a business model based on past experience to replicate success
- Teach you the skills you don’t know
- Assess and analyze your business data to resolve business issues
- Provide you with a framework to transform and/or solve business issues
- Be best use when the company has the resources and capability to execute the proposed system
Where do SMEs fit into this?
The challenge with most SMEs is their lack of resources and people capabilities to navigate through the transformation process when they try to implement a process recommended by a business consultant.
Using a hybrid of the business coach and consultant framework normally works best for SMEs.
This means a professional business coach who uses a structured business framework to support their client to co-create their solutions, and therefore has a higher degree of success in their transformation process.
The coach brings on board a combination of clarity, accountability, and support for the owners while having a structured business framework to help them to assess and co-create the business blueprint and help the owner navigate through the transformation process.
Who needs Business Coaching?
Business coaching is a necessity to every small business owner who is looking to grow or scale their business or when confronted with disruptions. Business owners need external help due to their lack of expertise especially when they are looking to brainstorm transformation ideas, working on multiple innovations at once, improve their accountability and receive guidance overall.
Entrepreneurship, as rewarding as it is, comes with the added stress to the owner of make all the critical decisions on their own. A business coach can also support the owner with getting out of their comfort zone and stretch them to achieve greater results.
Businesses that are in need of a critical approach and personalized advising, as well as those who struggle to implement new ideas, will benefit from business coaching.
An unbiased assessment from a business coach on the existing business’s performance and the owner’s skills and actions are important values to all business owners.
“To know what you know and what you do not know, that is true knowledge”
-Confucius
Business coaching case study
A local SME distributor of an international chemical suppliers that was acquired by a global chemicals company.
How does Business Coaching works?
Most business coaches should have a process in place to support their client.
In The Strategy Journey framework, and the book, there is a 5 step process to help build agility and capabilities for our clients:
Benefits of business coaching
Benefits of business coaching cannot be underestimated as it can have a major impact on SMEs at various stages of its Strategy Journey. These include:
- Overall business growth and increase in profit.
- Unbiased and honest assessment of the business, including advice for improvements.
- Helping owners and staff develop critical business skills such as leadership and team development, marketing and branding, business expansion and innovative thinking.
- Brainstorming and implementing new ideas.
- Building business architect that meets future needs.
- Constant innovation and adjustments to meet the changing market demand.
If you are running and SME business, don’t leave your success to chance. Get yourself a coach and a framework to help you navigate your Strategy Journey.