Small and medium-sized enterprises (SMEs) Down Under could use learnings acquired by their Greek counterparts during the country’s financial plight, as they navigate their way out for the COVID-19 crisis.
This is the case made by business columnist James Adonis in an opinion piece published last week by the Sydney Morning Herald.
Drawing “rare business lessons” from recently released research on Greek SMEs that managed to survive the economic crisis, Mr Adonis appears to agree with the scholars that the European country’s experience is “comparable to the crisis the world is facing due to COVID-19”, at least in the economic front.
“Few advanced economies in modern history have confronted the type of financial crisis Greece endured for almost a decade,” reads the opinion piece in its introductory sentence, with the columnist referencing the estimated closure of over 200,000 small and medium-sized businesses in Greece during the period 2008-2014.
The scientific analysis, Mr Adonis calls on, highlights the key “survival tactics” deployed by Greek SMEs that managed a successful recovery during the crisis.
And he claims research findings on the major drivers are “more relevant now than ever” for Australia, in view of Melbourne’s stage four lockdown toll already visible on its business economy.
LESSONS FROM SURVIVORS
From the analysis, which initially surveyed 250 Greek SMEs owners at the peak of the crisis, the columnist says the second phase is “much more fascinating” in presenting the examination of 189 businesses in that cohort that made it through.
The three key learnings standing out from the research, according to the columnist, are:
1) Downsizing: The main method deployed by approximately 65% of ‘survivors’ Greek SMEs surveyed involved more frequently cost-cutting and suppliers’ costs renegotiation, than job losses.
2) Μarketing actions: A broad term encompassing (for research-participating businesses) tools like price reductions, launch of novel products adapted to altered market conditions and quality improvement on products and services.
3)Εxtroversion: It refers to ‘extrovert’ practices followed in making an opening to new export markets and establishing new business partnerships.
NEGOTIATION: A CRITICAL SKILL
According to the scholars’ conclusions, the “main strategy of SMEs that survived was the one of improving product quality”, a finding that did not go unnoticed by the Sydney Morning Herald columnist.
In fact, Mr Adonis called this culmination of the research “a curious lesson for SMEs facing crises of their own”, due to the contradiction noted between the aims of cost decrease and quality improvement.
As to how it becomes possible to combine the two, he points to the very answer the authors of the research give in stressing the importance of “an effective supply chain management system” and the fostering of “cooperative relationships with suitable suppliers”.
“That’s why the researchers also discovered a critical skill the Greek business owners had was negotiation,”Mr Adonis says contending that the negotiation skillset is “the one capability SMEs must master” to achieve new agreements with suppliers, source new business partners and innovate within a drastically changed economy.
Closing with a reference to the Greek saying on lessons acquired via suffering, the columnist claims many of the takeaway learnings drawn from Greek SMEs’ experience during the country’s crisis, can be converted “into wisdom for us here as we prepare for our own rocky period ahead.”