The 'Review' Challenge in SMEs

It is well accepted that a structured review at a defined frequency is critical for continued performance to a plan. The process also ensures instilling accountability in individuals and teams towards their performance.

As a consulting organisation focussed exclusively on SMEs, we introduce and participate in structured reviews. Consider the following cases:

1. During the review of cost escalation of a key raw material in an engineering client, we asked the Purchase Manager on why he decided to procure when the commodity hit the peak and if he had explored other choices. The owner jumped to his defence and explained in great details as to how the commodity behaves, why the particular supplier was chosen, why they decided to pay the price and so on. All this while the Purchase Manager kept quiet. And we were left wondering who was being reviewed!
2. We were reviewing the low conversion of enquiries in a food processing client. Before the salesperson could answer, the owner intervened. He explained the challenges in the market and why customers are unreasonable in terms of business. He also said this is the best the sales team could do. The salesperson was happy to let the owner speak for him!

The above cases are representative of owners perceiving their roles as the Operating Manager responsible for every function in the organisation. In the process, they believe they are running each function. This prevents an objective review of performance. The side effect is employees never feel accountable for their omissions and commissions and are very happy to let the owner hang himself! In this scenario, mediocrity prevails and good employees are loath to continue. Star performers take reviews seriously, understand they are accountable and believe they make a difference. Mediocre employees, on the other hand, are happy to complete a set of activities, leaving the outcome to the owner.

SME owners need to appreciate that while they are owners and are responsible for the organisation, they need to hold the employees accountable for their individual and team's performance. A structured review is not their self-review but the review of the individual/ team being reviewed. So even if the situation was known, it is important for the employee/ team to feel accountable for the outcome.

In spirituality and in the management of SME businesses, a sense of detachment is useful!