The "Blocked Mindset Challenge" faced by SMEs in India

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Tanveer Shaikh | 25 Jun, 2013
The pivotal role played by Small and Medium Enterprises (SMEs) in our dynamic, yet pulsating and rapidly expanding economy has no denial. In spite of the huge underlying growth potential, they only contribute 17 percent to the Indian GDP. It is intriguing to know that about 80 percent of SMEs die out before their 5th year and only a few thousands amongst the potent SMEs are listed on the Stock Exchange.

External factors like market and competition, finance, government policies, etc. play an inferior role in hindering the forward leap. Neither is it the lack of aspirations amongst entrepreneurs, nor is their tendency to remain mediocre, which is stagnating the development of enterprises. What is plaguing this intent is the "Block Mindset Challenge" faced by the Indian SMEs.

"Mindset" is nothing but a set of beliefs or principles acquired in due course of time. These beliefs have laid the foundation for the success of the business, and have been accumulated with experiences gathered by an individual (entrepreneur or employee), throughout his/ her journey. But in today's effervescent and challenging market dynamism, one needs to follow Darwin's theory of adaptability, which advocates the survival of the fittest!

Mindsets exist at every level of management in an organization.

Mind-blocks at the Executive level: The employees at the bottom of the pyramid definitely form the foundation of organizational growth. It is ultimately their manpower which will materialize the strategic plan and structure laid out by the higher authorities. Mind blocks are born at this very base level of the organization; the nature of these blocks deepens and intensifies at every level towards the top of the pyramid. Employees reporting to managers develop stereotypes and may believe that their contribution may never be appreciated, that there may be biases; their opinion would not matter and so on. They develop a generalized viewpoint about the work culture, cross-functional teams and the senior most level of management.

Mind-blocks at Managerial level: The middle level managers holding key positions like SBU heads, project heads, etc. have evolved along with the augmentation of the organization. They have attained echelons with significant contribution and are a link between the top and lower levels of management. Prolonged appreciation for their involvement may also boost the self-image of the manager, which can act as a fatal mindset block. This may lead to a myopic mindset towards the employees. Due to lack of performance measuring tools, the manager may be biased towards a few employees. They may alsorestrict the progress and flow of innovation by their bureaucratic styles of leading a team. Beliefs like "a subordinate cannot think or contribute better or even as much as I can", "My way or the highway", "empowering employees can risk my position in the organization", etc. are lethal to the overall functioning of the organization. Autocratic leaders pursuing lofty goals can take companies away from their core business and blur a corporation's identity.

Mind-blocks at the Senior Management level: At the senior management level, the entrepreneur faces the most terminal mindset challenge. Majority of Indian Businesses are family operated and functional from generations. The entrepreneur may succumb to a rigid management style leading to differences of opinion amongst the old and new generation. Concentrating on the day-to-day operations of their organization, the entrepreneur may miss out on the greatest opportunity to expand. Fervor to handle and control each and every operation of the organization diverts their focus from the core business areas and sidelines the need to curb competition. It's high time that the delegation of authority is implemented in business so that you can focus on more important issues where your expertise lies.

How do Blocked Mindsets affect organizations?

The instability arising out of these mind blocks at every level in the organization hinders the creation of the leadership pipeline. It ultimately diverts the focus from strategic goals and there remains no congruence between the various functions of the business. These intrinsic loopholes affect the key growth essentials like value delivery, customer satisfaction and competitive advantage, leading to opportunity loss.

SMEs need to understand business in a 'holistic manner'

In order to get rid of this pessimism in the organization, a self-introspection study is crucial at all levels of the hierarchy. As per a Portuguese proverb "Change yourself and fortune will change with you." The entrepreneur needs to probe himself whether his mindset, focus and actions are aligned with the pre-meditated goal, whether these goals are well communicated to my organization, whether the organizational synergies flow in the direction of attainment of these goals. The key to making parallel all of the above is to identify impediments and sharing them with the management, so as to divert their focus from individual goals to work towards the common mission.

The managerial level employees need radical thinking towards the business and a deeper understanding of how to work with immediate teams. One needs to realize the significance of their role, serving as a link between both, the upper and lower level of management, and harness their position to streamline efficient functioning. Along with numerical aspects like targets and output, the managers should turn on the spotlight towards behavioral aspects of the workforce. This implies articulating and building values thereby measuring performance based on activities related to the holistic well being in the future.

Handling objections:

For organizations diseased with such manifestations, it is crucial to take immediate corrective actions. As quoted by Anthony J. D'Angelo, "The only real failure in life is one not learned from."Prioritizing this remedial process needs extensive commitment and needs to be carried out in an organized manner. While doing so, the leader would face enormous objections and resistance which may delay the process. Imbibing the right approach can be done by virtue of assistance offered by third party companies, which not only study these mindsets but also offer implementable and sustainable solutions.

According to Jack Welch, "Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others." So the initial brick is to be laid explicitly by the entrepreneur himself and the organization would follow!

* The author of the above article is Mr. Tanveer Shaikh, Principal Consultant, Acumen Business Consulting.
* The views expressed by the author in this article are his/ her own and do not necessarily reflect the views of SME Times.