RBM in small and medium enterprises

My sincere gratitude to readers for the support and invaluable comments that I continue to receive with great joy. The feedback always guides the writing process, in line with RBM principles, relating to end-user focus, stakeholder participation, continuous monitoring and use of feedback to guide decisions. This instalment is aimed at addressing a question, from a dear reader, regarding the utility of RBM in Small and medium enterprises (SMEs). The term SMEs refers to independently owned businesses that have maxima of 50 and 500 employees, respectively, ordinarily run by entrepreneurs who contribute their innovative and creative skills to develop and grow the businesses.

Such enterprises have proved to be instrumental in contributing towards poverty reduction and growth in emerging economies.

As discussed in earlier instalments, RBM is an approach aimed at optimising the performance and growth of an entity.

The approach entails focusing all resources and efforts towards achieving a desired plus targeted Simple, Measurable, Achievable, Relevant and Time-based (SMART) change(s) in the lives of an identified population through the provision of its goods or services as well as business processes.

According to literature, great goals are well-defined and focused and also, anything that is measured often gets done.

Therefore, setting SMART goals, closely aligned to the organisational priorities and driven by the associated overall vision, mission and long-term strategy characteristically puts the business on the fast-track.

Within RBM systems, the achievement of target change (results) dictates the method of achievement, required business processes plus resources, namely time, talent, materials and funds.

Accordingly, resources are channelled towards only the appropriate and essential tasks with any activity that does not contribute to the achievement of results being discarded.

This way, RBM systems promote efficiency and transparency as waste, theft or even corruption is reduced or eliminated.

Moreover, once goals are clearly defined and everyone understands what it means to succeed, recognising progress or the lack of it is considerably eased hence promoting success.

The fundamental assumption associated with RBM is that there is always potential to improve performance using existing resources, a factor that makes it attractive to SMEs where resources are often limited.

Its main principles encompass a focus on making the largest possible difference in people’s lives, maximum stakeholder participation, continuous monitoring and reporting, decision-making strictly informed by evaluative evidence as well as learning for continuous improvement.

Stakeholders, here, refer to parties that have an interest in an entity and can affect or be affected by the activities of that entity.

RBM systems comprise three cyclical phases namely planning, execution and learning.

Planning involves breaking down overall goals into manageable components, defining results to be attained within a specified period plus the selection of SMART indicators for monitoring progress.

Execution encompasses the implementation of business tasks and performance measurement, the latter being a continuous monitoring and reporting function to gauge progress towards the achievement of desired results and resource utilisation.

The associated performance measures are based on the needs and wants of customers rather than those of the investor or enterprise, again reinforcing the concept of customer centrality plus the need for adopting a benevolence disposition.

That is, focusing far beyond the mere provision of goods and services plus making profit to improving to include the well-being of society.

In some quarters the notion is referred to as Corporate Social Responsibility (CSR). Such broadened focus supports the achievement of meaningful results that promote success and survival.

All processes are highly participatory and known to reinforce buy-in and commitment to the achievement of results; elements that ultimately sponsor successful performance.

Participation can signify physical involvement of stakeholders or soliciting and using input from the same. In SME, the notion is effectively facilitated by the generally closer and direct interaction among stakeholder, notably the entrepreneurs, their customers and communities in general.

The practice promotes sound communication plus effective information sharing among stakeholders, transparency, accurate identification of customer priority needs and preferences, thus also reasonably guaranteeing a market for the business.

In the same context, staff fully understand what is expected of them, including the accountability for results function, making way for their buy-in to the goal(s) plus the assumption of assigned responsibility and accountability functions.

Besides, the regular communication also underwrites team-building, timely responses to changing priorities, continued, meaningful stakeholder engagement plus mutual trust.

Planning is preceded by the clear and consistent communication of the organisation vision, including the related priorities plus the critical role that each individual plays in fulfilling that vision.

Goal setting entails the collective identification of desired changes (or expected results), based on appropriate analysis of both the organisation and its environment, that the entity wants to achieve through meeting specific and priority needs of clearly identified customers/clients.

The process is sometimes referred to as the definition of results. Both research and experiential evidence show that setting goals that focus more on external stakeholders namely customers, competitors and citizens rather than profit and loss statements effectively drives success.

Organisational goals are broken down to levels that are achievable within the planning period. Individual staff goals, tied to these broken down sub-goals and organisational core values are assigned in a way that allows clearly appreciated staff their individual roles within the bigger picture; an element that fosters employee engagement and sound performance.

For example, where the overall strategy is to position a business as a leader in customer service, the Communications Assistant may undertake to answer the telephone on the first ring, the Legal Assistant may have aim at reducing the time to action customer requests for service by 20 percent while Courier may set a goal to dispatching documents within 24 hours of receipt.

Relatedly, key stakeholders collectively identify and select appropriate indicators for monitoring progress while mutual accountability for achieving target results is assigned to stakeholders.

Assumptions regarding the environment are also made, while potential risks are also identified. All the planning elements, namely goals, risks and assumptions and results should be reviewed regularly and adjusted as necessary in the course of business operations.

The entrepreneur or leader commits to providing the necessary resources, empowerment and support while employees pledge to perform at their highest levels while staff are held accountable for the achievement of results in addition to their actions and associated behaviour.

Accordingly, use of the approach calls for cultural change towards results orientation where all internal stakeholders embrace key RBM principles notably focusing on results, enhanced accountability, active participation, demand, supply and use of performance information to guide decision-making as well as learning from both success and failure.

Monitoring and reporting, a highly participatory and continuous function, involves assessment of progress towards the achievement of target changes, including the assumption and risks, within the environment, utilisation of resources as well as employee behaviour and actions.

The ensuing information is used to guide decision-making towards improvement.

Providing carefully calculated incentives for good performance may prove to be worthwhile. The collection of performance data for SMEs is again eased by the relatively smaller numbers of stakeholders involved.

Performance measurement by results helps entrepreneurs to know who is working and who is not, whether employees are down the hall or thousands of miles away from the former’s location, as is the case within the contemporary era of industrialization and globalisation.

Capacity gaps and the means to close them are also identified.

Performance measurement also democratizes the processes of reward and punishment as underperformers and are readily exposed and rewarded sanctioned or eliminated.

Besides, experiences from the Covid-19 pandemic, notably the need for many to work from home, has also reinforced the efficacy of focusing on results thus strengthening the case for adopting the RBM approach and its systems in all concerns including SMEs

RBM, a source of competitive advantage through fostering efficiency, effectiveness, customer and staff loyalty, morale and engagement, can, therefore, considerably improve the performance of enterprises including SMEs.

Furthermore, the relatively smaller size of SMEs facilitates accelerated institutionalization of the approach particularly participation, monitoring performance, changing culture towards results orientation and learning.–herald.co.zw

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