Growing from the inside

Any first-year undergraduate economics student knows businesses must produce quality products and services at sustainable volumes to succeed in the marketplace. But to grow above the point, at which a single entrepreneur’s vision can drive and support growth, an organization needs a cohesive consistency

in its approach to various processes and procedures.

Unfortunately most small businesses are (or think they are) financially unable to provide the managerial, technical and operational skills that employees and managers need to operate as a single effective team. This limits the company’s ability to expand beyond the limits of that entrepreneurial vision. It lacks the leadership and management skills to support significant growth and cannot grow those abilities commensurate with operational expansion. These requisite skills include business plan writing to attract outside capital; market and customer assessment and analysis to identify and target discreet niches; process enhancement; and, most importantly, management and leadership. When supervisors and managers lack adequate management skill, they limit the company’s ability to grow by focusing on doing everything themselves, instead of maximizing the capacity of the organization.

Perhaps most distressing, a simple solution exists which goes largely ignored by the millions of small businesses in North America. Inexpensive electronic and Web-based training (WBT) can be used in conjunction with other training delivery methods to fill the development gap. Yet few but the most tech-savvy firms are taking advantage of this opportunity, often because entrepreneurs feel their unique business (which often isn’t as unique as the entrepreneur thinks) needs a level of specialization that these solutions do not provide.

Contrary to conventional business wisdom, most organizations – including non-profits – have very similar needs for basic skills. The curricula of most schools and universities do not include the nuts-and-bolts things that make most workplaces function. Skills like basic computer operation, customer service, conflict resolution, listening, planing, budgeting, basic finance (to understand how an individual affects the organization’s resources); ethics and other fundamentals necessary to be productive are developed in different ways by various organizations.

Big businesses quickly provide them for employees, often as a requirement. In some cases, especially at large Wall Street investment banks, the skills developed in these internal courses are a reason why some people even apply for a job. However, heads of small businesses and not-for-profit organizations ignore this fertilizer of long-term growth to devote 100 per cent of their time and attention to keeping the doors open and growing the business the hard way. It is a strategy that, while penny-wise, is usually pound foolish and often self-defeating in the long run.

And it is a strategy that threatens not only individual enterprises, but a large sector of the Canadian and American economy.

Small businesses are the backbone of a country such as Canada. In the past year the stock price of the Russell 2000 index (the index tracking the performance of 2000 publicly traded companies of various sizes) has risen more than 40 per cent last year as these businesses have lead the way back from recession. Imagine what these companies could do with more highly – and rightly – skilled people.

More ominously, imagine what will happen if these small businesses adopt strategies similar to Dell, Intel and Citibank, which have used Internet efficiencies to outsource thousands of jobs to Asia and India – including customer service jobs requiring direct contact with customers in the North America through telephone and telephony connections.

There are classes available online, which allow people to develop basic knowledge and skills in a variety of subjects for a small fee. In the past, WBT was expensive to produce and therefore cost prohibitive unless the company was large enough to maximize training efficiencies. Today, many training companies offer WBT on a pay-as-you-go basis. This means that small businesses no longer need to make a significant up front investment to implement their own programs.

But, WBT is not a complete answer.

Companies must look at a number of factors to determine when online learning will meet their needs. Organizations must look at the skill and knowledge needed by their employees and whether or not WBT can provide the desired development experience. Training can be divided into two broad categories. First is generic training that covers key business skills including management, communication, finance, engineering and marketing. Second is company specific training that focuses on processes, skills and knowledge unique to the organization’s products and services. Both are necessary but must be affordable for small companies.

The first step, of course, is to put training on the corporate agenda, and dedicate to it an entrepreneur’s most valuable resource – time and attention. Once a strategic decision is made to invest in training the firm and developing the employee base, the rest is easy.