Discover the key to sustainable growth in today's dynamic business landscape. McKinsey highlights the pivotal role of productivity for Micro, Small, and Medium Enterprises (MSMEs), while Accenture explores operational efficiency in the software and platforms (S&P) industry. Join me as we explore how Lean IQ capabilities integrate these insights into reliable, sustainable, and growth-oriented production strategies. Let's unlock the potential for transformative success in the digital era.
According to McKinsey, boosting productivity remains key to fostering healthier incomes and fortifying business resilience, especially amidst today's global uncertainties and economic transformations.
In the wake of geopolitical shifts and evolving manufacturing and service landscapes, empowering the world's MSMEs (Micro, Small, and Medium Enterprises) becomes imperative. These enterprises are vital for job creation, economic growth, and value generation.
Efforts to unlock the productivity potential of MSMEs demand thoughtful and targeted actions. Only through a granular understanding of their productivity can we enact effective strategies. Three considerations can help shape stakeholder actions:
Creating a win-win economic fabric is important
The global business landscape is deeply interconnected. The success or failure of large companies can have ripple effects throughout entire economic ecosystems. As such, stakeholders, including policy makers, regulatory bodies, associations, and large companies need to foster the right enabling conditions for the growth and prosperity of all enterprises. These conditions may require measures that go beyond conventional policies focused on MSMEs, such as facilitating access to credit for MSMEs and encouraging training for MSME employees. In addition to such measures, it may involve strategies to build “collective productivity.”
Strengthening networks and interactions between large and small businesses can yield productivity gains in the win-win domains and in domains where large companies outperform their peers but smaller ones lag behind. Where small businesses outperform while larger ones do not, there would be benefit in enabling those small enterprises to evolve into large ones or merge with them to promote business dynamism. When both large and small companies lag behind their peers, more fundamental steps to improve the economic fabric as a whole may be needed; for instance, investing in physical and digital infrastructure, establishing transparent and fair regulatory frameworks that boost competition, reducing trade barriers, and ensuring equal access to financial capital.
Prioritization can pay off
Stakeholders first need to decide which economic domains to focus on to make MSMEs more productive. Failing to prioritize which opportunities to pursue can lead to a dilution of efforts and place a burden on the often-limited resources at hand. Some countries have selected and supported “national champion” sectors, as has happened with beverage manufacturing in Italy, automotive manufacturing in Japan, and R&D in Israel. Such prioritization requires meticulous identification of the nation’s competitive advantages and a keen eye for demand trends, as well as allocating resources toward innovation, facilitating access to capital, and cultivating supportive networks.
A granular and tailored approach matters
Measures designed to help MSMEs improve their performance tend to be broad, but the granular lens of this research reveals that different subsectors have varied needs. Stakeholders may need to design a menu of measures for each prioritized opportunity. In other words, taking a microscopic approach that reflects the dynamics of each subsector and country and that addresses barriers to productivity and scale in that context is warranted.
Building on the imperative of operational efficiency for sustainable growth, Accenture highlights critical aspects shaping the software and platforms (S&P) industry. As they put it, the S&P sector is a hotbed of rapid innovation and hypergrowth, reshaping how we engage with the world across multiple fronts—shopping, work, travel, and more.
In their recent blog, Accenture delves into the importance of operational efficiency as a catalyst for the next phase of profitable growth in technology. By prioritizing efficiency and embracing continuous reinvention, S&P leaders can navigate obstacles, expand their competitive advantage, and pioneer new realms within an ever-evolving market landscape.
The convergence of productivity strategies across industries underscores the universal significance of operational excellence in driving sustained success and innovation.
The Path to profitability and growth, and the winners of the next chapter of tech growth will prioritize and focus on four pillars:
Seek and Scale New Growth
With competition for new revenue reaching peak intensity, S&P players need to proactively target new growth opportunities. This requires incenting ongoing innovation, rewarding agility, and the ability to quickly evolve products based on market demands. This must be underpinned by active market sensing. Generative AI will play a key role in enabling organizations of the future to be purpose built for future growth.
Create and Deliver Winning User Experiences
User expectations are evolving more rapidly than ever, and companies must anticipate, create, and deliver high-quality, relevant, and trusted experiences at scale. Our most recent consumer pulse survey revealed 74% of consumers cancelled at least one subscription service in the past year. Immersive technologies, such as extended reality, offer exciting opportunities for engagement and monetization.
Power Your People
In the face of workforce rebalancing and rapid technological advancements, companies must prioritize employee experience and engagement. Creating innovative, growth-led cultures fosters career development and attracts top talent. Accenture modeling shows that 44% of working hours in the US are in scope for automation or augmentation. Companies such as Pinterest have successfully built a culture of experimentation, using data to continuously improve the employee experience and drive growth.
Unlock Value
Driving operating income goes beyond new revenue growth. Leaders must focus on unlocking value from within the organization. This involves identifying hidden areas where investment or partnerships can benefit the business.
In embracing the essence of operational efficiency and productivity, we're witnessing a convergence of transformative strategies across industries. From the imperative outlined by McKinsey to elevate MSME productivity to Accenture's insights on driving hypergrowth through operational excellence in the S&P sector, the focus remains clear: to achieve sustainable and profitable growth.
As we navigate this landscape, the integration of Lean IQ capabilities becomes pivotal. By harnessing Lean principles, advanced analytics, and strategic foresight, organizations can cultivate reliable, sustainable, and growth-oriented production strategies. This holistic approach empowers businesses to adapt, innovate, and thrive amidst today's dynamic markets.
Let's continue advancing towards a future where operational excellence and Lean IQ capabilities converge to redefine success in the digital age.
