SMITs: From Infancy to Adulthood

Volume 15, Number 1 Article by S Gopalan March, 2003

SMITs: From Infancy to Adulthood :

Sharing his long experience in the field, S Gopalan, CEO, Global Automation India observes that while companies may start out of the passion of a core team for a business idea, many of them lack the managerial completeness to become a mature organisation, and growing the company to a sustainable size and beyond becomes problematic. Companies have to cope with internal operational issues as well as the changing external marketplace.

When a company is in its infancy and is trying to establish an identity, the most challenging issues include market identification, recruitment and customer acquisition which often seem to happen more by default than as a result of planning. In adolescence, when the company is 3-6 years old, typical issues seem to be external and related to estimating business and managing utilisation, understanding the variable nature of demand, and investment and financial management. After six years, when a company has reached adulthood, the issues are how to break to the next level, instituting a well defined management structure to free up the available management bandwidth to focus on the future, and making the vital scale or niche decision.

To cope with unpredictable external factors, companies should be built to be flexible and adopt the appropriate strategies demanded by the market and economic conditions. Strategies here include structuring to accept funding, bootstrapping and mergers.

Reprint No 03108c