Small and medium-sized enterprises (SMEs) are often credited with being the engines of economic growth in many countries. But with growth come growing pains, and unless a business learns how to manage the challenges well, SMEs will struggle to sustain themselves, let alone create new jobs and business opportunities.
For this reason, the latest IESE Insight management review focuses on SMEs. However, the lessons related to financing, compensating for country weaknesses and taking the long view are applicable to any type of business.
IESE professor Albert Fernández Terricabras opens the discussion with an article on "How to Fuel Healthy Growth," based on his experiences of working with SME owners and managers, who often face credit and cash-flow problems. Although bank loans remain the preferred choice of external financing for many European SMEs, he highlights several other sources of financing, including the models that are attracting the most attention these days: crowdfunding and crowdlending.
Apart from solid financials, SMEs need to consider their ventures in light of their country context, which is the focus of the article by former Harvard Business School professor Walter Kuemmerle. His studies of companies in more than 20 countries identify "Five Keys That Will Make or Break Your Business." The author’s advice is especially useful for SMEs contemplating international expansion.
Meanwhile, Danny Miller and Isabelle Le Breton-Miller (HEC Montreal/University of Alberta) reveal "What Every Small Business Can Learn From Great Family Firms," based on their studies of enduring family-run organizations, most of which started out as SMEs. The secret to flourishing for generations is to pursue what the authors call "the 4C’s" of Continuity, Community, Connection and Command.
Taken together, these three articles hold lessons not just for SMEs but for all managers looking to give their enterprise a tune-up, so business engines can keep the global economy powering ahead.
Innovation Tools, Management Tips
Elsewhere in the magazine, Gerald F. Davis and Christopher J. White (University of Michigan) apply lessons from big social movements to the corporate space to show "How Your Company Can Change the World." By empowering your internal activists, your organization can reap the benefits of socially responsible behavior.
In another article, IESE professor Tony Dávila and co-authors commend the Landscape Monitor, a tool for outside-in innovation. They argue that management systems need to sense the external environment as effectively as tools like the Balanced Scorecard analyze internal performance. Their framework will help managers see farther and earlier what’s coming, so they can be innovation leaders.
The magazine also features an interview with Stanley Motta, head of one of Latin America’s biggest family business groups; a case study on Swarovski’s attempt to streamline its supply chain; and communication advice from Guy Kawasaki, the former Chief Evangelist at Apple.
All this content comes as IESE Insight celebrates its 25th issue. To mark the occasion, the magazine also contains 25 top management tips by IESE professors drawn from the past 25 issues.
Members of the Alumni Association and subscribers to IESE Insight – a quarterly research-based magazine, published in separate English and Spanish editions – can freely access all this content using their membership credentials.
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Go to the latest IESE Insight management review