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Embedding digital capability and agility in small businesses

Why small businesses matter

Small businesses are a critical pillar of Ireland’s economy, on average paying 50% of the costs of the running of a county’s operating expenses through business rates while nationally small businesses provide 80% of the jobs. However SMEs have poor productivity growth which is a factor in why few micro businesses scale up to become medium-sized firms. Unsatisfactory  SME  digital  adoption is a key reason for this. Despite market volume or business growth opportunities, most SMEs keep lagging behind with 37% of employees missing basic digital skills leaving SMEs  ill-prepared to navigate the big technology changes coming their way. 

"I am struck by the “thickness” of city ecosystems to drive innovative tech firms (research, start-ups, scale-ups, incubators, accelerators, co-working hubs, capital funds) and the “thinness” of ecosystems to grow minority-owned local businesses."

Bruce Katz - Brookings Institute

 

We here to help!

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A mass investment in digital assets just happened

 

The past year saw an unprecedented mass mobilisation of digital across every part of Irish society and economy. Businesses migrated online, many for the first time, in direct response to the lockdowns (source .IE). Surely all of this is a good thing? 

 

Well let’s dig a bit deeper, how are SMEs using these digital assets? According to a framework created by Ireland’s .IE the digital activities of SMEs span three pillars namely Communicating,  Transacting and Boosting. 75% of SMEs are E or F grade in digital intelligence (i.e. Boosting) suggesting that there is a low presence in the ability to use digital assets to their full capability (source .IE). 

 

Put another way  if we think of digital assets (CRM system, a website or accounts package) purchased by a small business owner as a digital exoskeleton for their business, in many cases this exoskeleton is still lying untouched in the box or to continue the analogy is being used superficially to make tea and coffee for the staff. 

Making the change from ownership to leveraging

If you ask a small business owner how they manage their business they talk about checking in with their staff, keeping in touch with their main customers, watching their cashflow. All important things to monitor however they rarely mention checking in on the intelligence their digital assets should be giving them. 

 

To help small business owners in this regard we seek to change behaviours, to instil a mindset that these digital assets are the ‘invisible workforce’ of the business. 

For many small businesses their digital workforce is blissfully asleep on the job!

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A learning journey from adversity to high growth 

DigitalHQ's Digital Champion for Small Businesses, Eoin Costello, established Novara Technology and, after working through a number of early setbacks, he grew it to one of Ireland's largest web businesses. He learned through practical experience how to leverage the best of his core team and technology to grow rapidly. At the time of sale to one of Ireland’s largest broadband companies for a seven figure sum, Novara Technology had -

  • Grown to Ireland’s second largest hosting company

  • Had twenty staff, was highly profitable with zero debt

  • Had one of the best staff to sales ratios in the industry

  • Had excellent staff retention rates

  • Had in excess of 10,000 clients (including national and international organisations)

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Mindset change was key to success for Novara Technology 

Key to the growth of Novara Technology (which traded as Register.ie/Host.ie) from the front bedroom of Eoin's house to its successful sale was Eoin's change in mindset from feeling that everything had to be done inhouse. He learnt that high growth came from achieving the optimal mix between the business activities that the core team carried out, the activities that were automated, the activities that were outsourced and finally the activities that were not adding value and were ceased. 

 

This constant attention to keeping the mix right in order to deliver customer value led to the Irish Web Hosting Review noting at the time "Novara has continuously been recognised as a market leader for developing innovative applications and top customer service to maintain its position among the top hosting companies in Ireland".

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What is the Digital Growth Mindset

The Digital Growth Mindset is the constant focus on the best way to grow your businesses using the optimal mix between your core team, technology and outsourcing. This requires a significant mindset change which is not so much ‘training’ owners how to use the functions of certain tools but creating a mindset of how you can best achieve the outcome you need for your business. 


The key to this is removing non-value add work through digitalisation to enable you to focus on the core offering of your business, that which is valued by your customers as a clincher in choosing you over all your competitors.

4 levers of digital growth

There are four levers of digital growth which start with DIFFERENTIATION - creating effective, digital friendly points of differentiation in the value proposition for the businesses. VISIBILITY - The visibility of your digital workforce - How are you monitoring and managing daily your digital resources in delivering your mission critical goals for your business. Thirdly your PRODUCTIVITY, constantly monitoring the balance between physical and digital inputs for best fit to achieve the outcomes you need. And the final pillar is AGILITY - Monitoring the dynamic tension of growth factors to achieve the best balance to progress from where you are now and where you need to get to.

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The Shamrock Organisation

Charles Handy (born Clane, Co. Kildare) coined the terms "portfolio career" and in his 1989 book, The Age of Unreason, the term "Shamrock Organization" in which professional core workers, freelance workers and part-time/temporary routine workers each form one leaf of the "Shamrock".

Handy believed that people were the most important resource within any organisation and he advocated meeting the needs of workers through job enrichment. He did not believe in jobs for life but contracts or short-term jobs were more appropriate. He suggested that non-essential work should be contracted to specialist people who could work more productively and efficiently.

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Our Growth Guides for Small Businesses

Are you a small business, social enterprise or community group that is short on time but needs to keep up with the latest ways to grow your business?

 Our Growth Guides below contains all the learnings and tips from past @DigitalDúnLaoghaire meetups and workshops are captured for you inculding:

  • Topic by topic guides captured from our Meetups and Lunchtime Briefings.

  • Insights from top experts.

  • Tops on growth from professionals.

  • Next steps and tools to help grow your business.

To see all our guides click here.

So what next?

Working with our partners and our Advisory Panel members DigitalHQ will commence a biannual intensive Digital Growth for Small Businesses programme. Goal of the programme will be to support towns in nurturing local ambitious businesses to take them to the next stage of their growth. We will be recruiting on the basis of ambition, targeting businesses (irrespective of type) that want to go from 5/10 staff to 20 staff within 24 months


We hope that participant companies will act as catalysts in their local business communities at the end of the programme. If you would like to be notified of recruitment for the first programme please jot your details down here.

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