Taking the road less travelled: a unique insight into how SME’s can rebound from Covid-19.

Let me preface this piece by contextualising it with my own background. I am part of the first wave of students from the U.C.C Law and Business program. During the course of my preparation for my final examinations, a thought occurred to me. How can I apply the content studied in my degree to the current economic situation? When I prepared for one module in particular, I realised an oft overlooked area for small and medium enterprises (SME’s) could be the key to their recovery once businesses reopen. This is the field of management.

The area of management is practice driven and as a result of this, many small and medium business owners categorise this area as an innate gift rather than something which can be tangibly developed.

I propose, however, in times of crisis, to invest in and focus on the transformation and improvement of existing methods of management. This may require hiring management consultants or advisors.

Small businesses such as traditional restaurants and pubs, which have been battered by the current pandemic in their current form could lend to the employment of for instance, Kaplan and Norton’s “Balanced Scorecard” approach. This approach urges managers to view the business as a holistic entity, in four parts, or perspectives. These being, the customer perspective, learning and growth perspective, internal business processes and finally the financial perspective. The firm must identify these perspectives based on relevant key performance indicators inspired by the firm’s mission statement. The firm then seeks to satisfy all stakeholders relevant to each perspective. This changed the landscape at a time where managers merely only considered the financial bottom line. Thus, Restaurants and Pubs could benefit from this reform as it urges a broader look at the entire business, to make sure the firm is fighting fit in every domain rather than just having a healthy balance sheet. This greatly increases a businesses ability to adapt in the uncertain times ahead and establish stability in the long term.

Furthermore, other SME’s like factories and those in the manufacturing industry could also hugely benefit from this process. Rather than looking to discard staff and close business units, instead use management theories and implement a “Lean” or “Just in time” manufacturing process. A great area of concern for these firms is that of waste. So, firms in the manufacturing space could gain untold levels of savings if they follow the lead of Taiichi Ohno of Toyota Japan and seek to eliminate all non-essential tasks from the work, such as reducing downtime of machines and reducing the number of defects. Firms only produce when it is directly required. If waste is reduced, the savings can be used to keep staff employed and preserve healthy liquidity ratios.

Therefore, I will halt this piece using these two examples as a microcosm of the benefits firms across a plethora of industries can garner from utilising appropriate management models. Management should not be regarded as a static model in times of uncertainty. If SME’s realise this early, I contend that the benefits will be massive.

Ireland is a fantastic country, with some of the finest and most resilient business people on the planet. I am confident that Irish businesses can weather the storm of the current pandemic. However, if this article provides some food for thought on how to approach and improve reopening, then this will have been a worthwhile endeavour.