Are SMEs Being Encouraged to Level Up too Quickly?
I’ll admit it; I’m not particularly good at computer games. When I played Halo on the original Xbox against one of my younger brothers I got shot. Lots. On the Nintendo Wii versus my junior-school daughter, her wrist-flicks fired off aces without a single “proper” serve. That’s just not tennis. As for driving games, I’m used to wrestling with a wheel & stamping on pedals, and the last time I remember fighting in a Judo match, I don’t recall manically pressing a convoluted button combination to throw my opponent.
But strategy games, ah… that’s another matter. And what does this all have to do with small business, I hear you say?
The Real (Business) and the Virtual World
Whilst my ten-year old, who has never played a game of real tennis in her life, can beat me at Wii Sports tennis, or that teenager who hasn’t loaded and fired a Lee Enfield .303 rifle can shoot me out of the water, it’s that very same youthful exuberance and lack of experience that could put them at a potential disadvantage in the real world of the business strategy.
With the supposedly short attention spans of people these days and the many distractions, it seems to be the promise of quick glory that entices both games players and some businesses.
Recently, in a bid to get out of the doldrums, there has been talk of investment in high-growth businesses. Only last month a study looked at how the proposed British Business Bank investing in high-growth SMEs could potentially give the UK economy a boost.
In a recent business advice article Exporting: Opportunities for UK Exporters small businesses are encouraged to tap into overseas markets that are experiencing rapid growth so that UK businesses can capitalise on and jump aboard the expansion.
But is that rapid expansion always a force for good?
Back to Basics
My first real love of the strategy genre came about in the early 1980s when I loaded Lothlorien’s “Paras” onto my BBC Model B. Since then I migrated to the PC where I fell in love with a bundled version of Sid Meyer’s “Civilisation 2” and every incarnation since. Now that I’m an iPhone owner I have games such as Kingdom Age in my pocket.
Another player recently beat me at my game but then levelled up extremely quickly as I monitored their account for a week or more after my defeat. Whilst their aggression and unit advances were incredible and their level way beyond mine (I’m level 6, they’re now level 28 – we were both level 5 when they beat me) they have a limited kingdom size, very few money-generating buildings and their income was around a tenth of what I was earning.
It’s these parallels that concern me. Is a rapid-growth business akin to a gamer who craves the highest levels? By “spreading themselves too thinly” do high-growth businesses risk pushing for quantity and not quality?
Or is it our approach to expansion that is the problem?
My personal strategy is usually the “slowly but surely” approach where I build up a steady & stable empire and take my time doing so. I’ll balance the construction of money-generating buildings with expanding my land, adding the capabilities to create stronger defences and refrain from the temptation of doing missions for quick gains & I now refuse to retaliate against the occasional player who comes by and beats me up.
For these very reasons I am often a low-level player who punches well above my weight. It’s a slow and laborious tactic but ultimately it makes me stronger.
Is this what small businesses should do too? Maybe they should reassess their situation and see where they’re expanding and ensure that all their bases are covered, that they’re not spread too thinly and that they actually have a strategy in place rather than blundering on to reach the highest levels they can.
Like the only player that has beaten me recently, he is the only one in weeks but he seems to have reached a peak and his cashflow is extremely poor. I might be slower but I’m certainly richer – so isn’t that something that SMEs should do too?