In the past, most SMEs have accepted underlying issues within their organisation, despite knowing they are holding the business back. In essence, the business has struggled through and generally got away with it even it meant that they failed to reach their full potential.

Going forward, in a more transparent, demanding and competitive AI-driven world, the consequences of carrying an under-performing organisation are likely to be more severe.

People’s expectations and desires will be much greater and their patience threshold lower because they too will be under pressure to compete.

There are many reasons why SMEs under-perform and we illustrate some common flaws below. These can all be resolved by building and maintaining a modern and healthy organisation.

Here are some of the reasons why SMEs underperform:

• Against a backdrop of extremely busy executive schedules, few businesses take the time to review and modernise their structure, instead preferring a series of short-term fixes. In these circumstances, short-time fixes are emotionally easier to implement than deeper, more structural solutions.
• These short-term fixes are implemented piecemeal at the function/department level and whilst they provide some short-term improvement in productivity at that level, they increase the fragmentation within the organisation, creating a series of miscommunications that grow into quite destructive and silos
• Without the right processes, it is difficult to objectively identify and tackle the real source of the issues holding the business back, and so business leaders end up tackling the symptoms rather than the root cause of the issue – the result is more short-term fixes
• Many SMEs lack a strong, well formulated customer strategy that sets out a detailed customer journey, understood by everyone in the business. As the organisation fragments, the coherence of the customer journey deteriorates.

As a consequence, operating teams start to struggle with the goals they are being set and start to see that the left-hand side of the business is no longer communicating with the right; creativity and productivity stagnate and people lose their motivation. The shifting mindset is noticed by the customer through, initially, the quality of communication and then the operating performance.