Small and medium enterprises (SMEs) have been the key growth engine of the country’s economy, generating largest employment pool across all business segments. While the term SME may have been of recent origin, Indian entrepreneurs can be said to be running SMEs retrospectively since the time organised businesses emerged in the country. These businesses modernised with time, upgrading technology, leveraging institutional finance and developing marketing and branding strategies, where most notable inflexion points came through generational shifts.
Much like their bigger, corporatised counterparts, the younger generation of SME promoters is now developing the feature that it had missed so far. Due to global exposure, the Gen-Y SME leaders have taken up the onus of putting new energy in the sector with their out-of-the-box thinking and leadership skills. Leadership innovation has become the new buzzword even for those companies in the SME sector that were considered too old school to change.
The most important aspect of the new leadership approaches of Gen-Y SME leaders is how they see their employees. Unlike their parents, these leaders now believe in making their employees empowered, especially in decision making, rather than making them passive partners in their growth story. Behind this new approach is the travel, educational, technological and media exposure these leaders have got. Umesh Modi, chairman and managing director of Jupiter Infomedia Ltd, feels that the new generation is more tech-savvy and focused about its objectives. He adds that millennial leaders value interpersonal skills more than the previous generations did and believe in inspiring their employees rather than being authoritative. “Employee engagement is the biggest issue that organisations face today, and creativity helps in coming up with innovative ways to engage millennials. The innovation in technology and management mantras tossed by management gurus have helped the millennial leaders become better leaders,” he says.
The Gen-Y leaders are fearless and open to taking up challenges that a global, competitive economy throws. The evident change of guard has inspired the sector with its advance skill set and multi-pronged approach to address the core issues by introducing a new business culture with a global outlook. However, more than the need to change for better, the transformation may be forced on the sector because of the increasing stress on services in the economy. Garima Tripathi, co-founder of Care24, a home healthcare service provider in Mumbai, says that SMEs in the service domain rely more on tech support, which has undergone a revolution over the last few years. To comply with the challenges of this niche segment, young entrepreneurs are switching to advanced support mechanism that provides them ease of handling the entire operation without compromising on the service delivery and quality. She says, “The transformation has taken place at two levels: first is contemporary problems that the young entrepreneur is trying to address, and second is the new approach they are taking in solving those problems.” She explains: “Today our country is struggling with newer issues in healthcare, like widespread lifestyle diseases, and a lack of family time and reliable care providers. The new generation is tackling these challenges with the ground level use of disruptive technologies. Right from creating training content, care tracking to remote monitoring, the newer solutions offered are more scalable and accessible to those in need.”
The tech age has led to the growth of disruptive business models, which are a norm today. Right from home-based healthcare to buying medicines online, everything is a click away. This is primarily because the budding and Gen-Y entrepreneurs are aggressive in their approach to transform the traditional business models of their enterprises. With defined objectives and a roadmap to take their entities to newer heights with calculated risk, they do not want to be just another set of caretakers of established business houses. Instead, they look forward to expand, make their enterprises brands and be counted in the larger business community. Mitchelle Carvalho, CEO of CogMat, strikes a similar chord with Tripathi. She says, “With basic needs met to an extent, an advancement in technology and easy access to knowledge repositories, like the internet, has given each passing generation a greater advantage in ditching conventional career choices, which were meant for survival, and pursue their dreams of creating and running businesses.” She further elaborates, “Risk-taking abilities, coupled with an ease of access to funding, has emboldened young SME leaders to pursue novel business ideas and work towards growing their businesses aggressively.”
Handing over the baton of leadership to Gen Y, and now, millennial leaders, and empowering them with the freedom to take decisions have transformed the business environment in the sector. Sunil Alagh, the founder and chairman of SKA Advisors, says, “The next-generation leaders have a greater ability to attract people, as they create an open, trusted environment for them to ideate and grow independently.” Convinced at the leadership skills of the new generation, he adds, “The young brigade leads by example rather than following the regular boss-employee approach. It aims for larger targets and higher rewards and believes in taking risks. The new-age leadership is all set to inspire people by revolutionising the SME sector with collaboration and recognition as well as harnessing technological innovation.”
Global Competitiveness over Legacy
In today’s world of globally interconnected economies, liberal minds do not deter from pushing the boundaries by displaying the ability to handle risky markets in both domestic spaces and overseas. Resonating the same thought, Tripathi asserts, “In healthcare, we value legacy and experience more than other industries do. The need of healthcare in our nation today is so humongous that we want a very collaborative environment where the old guards can guide the young leaders as well as learn from the innovative approach to some of the hardest problems. We are one of the five countries with highest number of heart patients in the world, over 15 lakh cancer patients and numbers are troubling in every other disease. Legacy has to evolve with the present knowledge to address these problems.”
Like everything else, global connect also has its pros and cons. For example, MNCs can influence political decisions, leading to inequality as some developing countries struggle to compete with the developed world. However, the plus side of it comprises access to more relevant information and a plethora of opportunities for individuals and businesses to grow and diversify the portfolio. Besides, consumers get a wide variety of products from across the globe. Young leaders treat globalisation as an opportunity to grow by having a business plan in advance and managing the existing resources smartly in order to reduce the risk factor.
Throwing light on this, Carvalho says, “Older generations bring resilience, tenacity and a ton of experience, not to forget a deep understanding on laws and regulations. The type of a business may vary but we all face the same challenges while running them and having an experienced sounding board helps make certain business decisions better than others.” She elaborates, “This is that time in the world where it’s easy to get your business a global footing. However, it is also equally important to constantly innovate and push the envelope in order to survive. The ease in starting businesses brings in huge competition, and a young leader must remember to never take their customers and work-mates for granted in order to survive and thrive in their businesses.”
Digitisation of the economy has propelled the demand for a proactive business environment and the suave leader fits in the new frame well. A quick, responsive and 24×7 work culture leaves no room for discomfort, as the survival has become more challenging. With access and control becoming handy, the pressure heads grow around you. “Experience helps you understand the markets better. If you have been in the industry for a while, you are bound to have contacts and nothing gets work done faster than having contacts,” feels Modi. He further explains that due to experience, the business strategies are better experimented and tackling the problems comes naturally. He feels that working can be really stressful and with time one learns to manage oneself better and deal with stress. With experience, comes confidence, patience, and perseverance. All these qualities are essential for success, according to him.
Challenges that Turn Young Entrepreneurs into Leaders
Any business faces issues at various fronts, including internal issues like finances, labour, plant infra, etc., as well as the outside glitches, such as policy reforms and changing global business scenario. Speaking on the challenges involved in her industry, Tripathi avers, “Policy reforms are always the longest to be implemented and would greatly help in changing the care-giving scenario in India. However, the current major challenge is to ensure highest quality of service with the paramedical staff.”
Young entrepreneurs also overcome the limits of traditional financing models by opting for the venture-capital route or availing government schemes as and whenever needed. They are also quick to make appropriate changes in the team and management to avoid any dent in their goals and budgetary requirements. “For any business to survive, we need regular cash flow. Paying the overheads, such as payroll, operations and maintenance are the recurring costs. Even growing businesses that are doing well on paper can get into trouble if they don’t manage their finances. Expansion and reinvestments are costly affairs. In order to success, businesses need a financial plan and they need to stick to their budget. In order to achieve economy of scale, we need operations of the higher level. This too requires more finance,” says Modi.
Being part of a highly competitive fast-paced industry, the challenge is always about keeping abreast with global trends and new innovations. “What is brand new today is redundant tomorrow. With every new client and brand, our challenge is to understand perceptions and preferences of different consumers groups. But, dealing with these challenges gracefully while under stress is what I believe contributes to one’s personal and professional development,” highlights Carvalho.
The transformational lag in the SME leadership hit the right chord with successive reforms being introduced and practised across all the levels of business verticals, such as financing, administration, global reach out and penetration of technology. The Gen Next definitely has an edge over its predecessors with plenty of information available to them through segment-specific research and data; fast and responsive networking infrastructure; and availability of skilled labour and professional workforce. A major plus with these resources is that young and smart industry leaders are open to learn and implement newer concepts to boost the quality of their products and services as well as enhance the competitive index.
(With inputs from Arshia Khan)