Future-Fit for SMEs
Businesses of all sizes across all sectors are acknowledging the need to respond to shifting socioeconomic and environmental pressures, and many are recognizing that the Future-Fit Business Benchmark (FFBB) can help to guide them. But while larger companies may speak the loudest, they are also the slowest to adapt.
Small and medium size enterprises (SMEs) can often respond much more rapidly and radically to changing market forces – but they are also invariably resource-constrained. So it should come as no surprise that we are often asked by SMEs what is needed to get started with the Benchmark.
Gathering information to assess performance does of course require some work. But from our experiences to date, one thing is clear: when it comes to making a business Future-Fit, an ounce of prevention could be worth a pound of cure down the road. Companies that seek to identify where they are most efficient in generating positive outcomes will be able to use that information to maximize their effectiveness down the road. Similarly, identifying risk areas early on – while it is still relatively easy to change tack or adopt new practices – can save time and money in avoiding future pitfalls.
[The FFBB] is very helpful to support planning of new projects and for continuous monitoring of ongoing projects… It captures all the impacts we need to measure… this is a strategic list we can use for our future projects.
Carlo Tacconelli, Technical Advisor, Absolute Energy on assessing Absolute Energy’s Kitobo Mini-Grid Project using the Business Benchmark
Here are three ways in which SMEs can start using the Benchmark to build a better business:
1) Uncover any blind spots
At the core of the Benchmark lie 23 Break-Even Goals, which every company must strive for. Depending on the nature of your business, some of these goals may already have been accomplished, while others might take many years to reach. But to get started on the journey, you first have to identify where you are. So for each goal, ask yourself whether you currently possess all of the information necessary to calculate the company’s progress. If not, how difficult would it be to obtain that information?
This exercise is a quick way to build up an overall picture of what knowledge you have, and where there are information gaps – which could indicate blind spots in the way you think about business risks. Not all issues will be as significant to every company, but identifying what you know and don’t know is a critical first step.
2) Identify where you should be paying most attention
All 23 Break-Even Goals matter, but the attention any one goal demands will vary depending on the nature of the business you are in. You can start to prioritize where to put your attention by asking yourself three questions. First, how difficult will it be for the business to reach the goal? Second, how much could society be impacted if the goal is not reached? And third, how much risk could the business be exposed to if the goal is not pursued?
You may find that your business already has a good handle on what its social and environmental risks and opportunities are, but in our experience most SMEs who go through the Break-Even Goals uncover at least a few surprises.
3) Don’t be afraid to acknowledge performance gaps
The Future-Fit Business Benchmark covers a wide range of impacts – from procurement and employee wellbeing to product design and waste – and not even the best-run Fortune 500 companies have addressed them all. In fact, many companies perceived as being among the best in their sector often don’t know exactly how far away they are from where they need to be in at least some critical areas.
So rest assured that nobody – not even investors – is expecting that your SME will have all of the answers. The important thing is to demonstrate that you are aware of the key issues your business faces, and that you are starting to address them. Being open and honest shows the market that you have good management practices in place, and that you are less likely to be blindsided by in an ever-more volatile, uncertain, complex and ambiguous world.
I would urge all SMEs to follow these three suggestions, if only to get some sense for the social and environmental stumbling blocks you may encounter in the years ahead. You can get started today by downloading the Future-Fit Business Benchmark documentation at FutureFitBusiness.org.