Develop innovative SMEs to drive their sustainable competitive advantage

ShawnTheunissen.jpg“Innovation” has become synonymous with entrepreneurship, but in enterprise development (ED) initiatives it must be defined – and enabled – within the context of the individual participants on the ED programme as well as the procurement departments these businesses serve. If not, you run the risk of innovation becoming an onerous barrier to entry to these initiatives, and remaining an aspirational target that doesn’t drive real deliverables, says Shawn Theunissen, head of CSR at Growthpoint Properties and Property Point (Growthpoint Properties’ enterprise development programme), in this month’s SmartProcurement.

While most entrepreneurs would agree that innovation is critical for the long-term sustainability and success of their businesses, it’s become an elusive business objective for many local SMEs.

“Although media and many business incubators use entrepreneurs like Richard Branson, Mark Shuttleworth and Steve Jobs as worthy role models, we need to acknowledge that innovation at this level remains unlikely for many South African businesses,” says Theunissen. “As such, it’s critical that we redefine innovation in their context – reinforcing that it often simply involves responding to market needs quickly and accurately, and ensuring that appropriate systems and processes are subsequently put in place.”

This will ensure that innovation becomes an extension of the SME’s thinking and operations, explains Theunissen. “If we define innovation as a small business’ ability to adapt to changes in its environment, this process can catalyse new ideas, products and service offerings, and potentially different ways of doing business.” In this way, innovation can help a SME to exploit changes and opportunities in order to stay relevant and gain market share. “This is especially possible given the speed with which entrepreneurs can typically effect change in their businesses.”

Theunissen maintains that ED programmes that integrate procurement directly into their initiatives are able to give incubatees a strategic edge in this regard: “In order for entrepreneurs to identify the systems and processes they need to put in place to enable innovation, they have to know what’s driving change in the market.” This makes understanding their environment and market critical – where an integrated ED programme like Property Point can make all the difference.

Because Property Point connects the SMEs on its programme with Growthpoint Properties’ procurement department, entrepreneurs work directly with the procurement team, as well as the building and facilities managers at the respective properties they are servicing. This means that they get to understand and appreciate their customers’ needs (including the pain-points and pressures driving business) and look for opportunities to address these.

“As soon as our SMEs have found an opportunity, they’re encouraged to seize it.” If additional training and/or support is subsequently required to enable this, Property Point is able to provide this at a very practical level. Entrepreneurs are then also able to pioneer and trial their innovative new offerings in a comparatively safe environment.

“Because Property Point SMEs have to remain competitive at all times, the process of incorporating innovation thus becomes an invaluable real-life, real-time learning experience. In this way it actively drives sustainability and boosts the entrepreneur’s ability to compete in the market,” Theunissen concludes.

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