By Success Factors Necessary for SMMEs Growth: A Summary of the Narratives of Successful Contractors Abimbola Windapo University of Cape Town
Construction Industry Development Board Construction Industry Development Board 16 Successful Contractors who responded to the personal interviews 16 Successful Contractors who responded to the personal interviews 2
Success and Growth Defined Need for Success Need for Success Is there a recipe for success? Is there a recipe for success? Study Methods: Successful Contractor Narratives Study Methods: Successful Contractor Narratives Is it Possible for SMMEs to Grow Successfully into Large Companies? Is it Possible for SMMEs to Grow Successfully into Large Companies? Success Factors Necessary for Company Growth Success Factors Necessary for Company Growth Environmental Environmental Leadership, Company Organization Structures & System Leadership, Company Organization Structures & System Time Time Conclusion and Recommendations Conclusion and Recommendations 3
Success: the attainment of an aim or status Success: the attainment of an aim or status Growth: the process of undergoing development or expansion (maturity & capabilities) Growth: the process of undergoing development or expansion (maturity & capabilities) Source: and growth2.jpghttp://daimanuel.com 4
There is only one alternative to success: failure There is only one alternative to success: failure Construction Business/Industry is endangered Construction Business/Industry is endangered Skills attrition and sustainability Skills attrition and sustainability Employment generation Employment generation Source: animals.nationalgeographic.com 5
There are no hard and fast rules that can be set for commercial success There are no hard and fast rules that can be set for commercial success However, certain clear arrangements are evident in successful companies However, certain clear arrangements are evident in successful companies 6
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Yes Yes Lubbe Building & Electrical Contractors was founded in 1981 Lubbe Building & Electrical Contractors was founded in contract for construction of high-rise flats in Israel contract for construction of high-rise flats in Israel 2010 – Generation of Turnover + R93m 2010 – Generation of Turnover + R93m Source: Lubbe Construction (Pty) Ltd Profile 8
9 Environmental Factors Leadership, Company Organization Structure & Systems
Opportunities: - Government Policies/Regulations Government Policies/Regulations Type of Market Type of Market Economic Conditions Economic Conditions Industry Structure Industry Structure Threats to overcome: - Threats to overcome: - Clients Unstructured Methods of Payment Clients Unstructured Methods of Payment Governments unclear method of Procurement Governments unclear method of Procurement 10 Grade Grade 7 & Grade 5 & Grade 2 to
Strengths & Weakness Weakness 11 Company Leadership Type & Size of Business Structure StrategiesResources Efforts
Aspirations (mission & Vision) Aspirations (mission & Vision) Capabilities/Competencies Capabilities/Competencies Style of Leadership Style of Leadership Type of Leadership Type of Leadership Leadership Role Leadership Role Values, Character – Behaviour and Personality Values, Character – Behaviour and Personality Experience Experience Source: b2binternational.com 12
Founding Teams – Differentially able to navigate within the constraints of the founding environment Past experience together in a construction company Past experience together in a construction company Experience together were varied but relevant Experience together were varied but relevant 13
Weakness - Lack of Financial Resources Source of Finance: - Severance Benefits Severance Benefits Family Family Mortgaged Properties Mortgaged Properties Savings Savings 14 Source: myspaceantics.com
Developing a Strong Financial Base Track Record Good quality products & services delivered at the right time Maintaining good relationships with clients and suppliers – paying on time Acquisition of necessary tools & equipment Assets can be used a surety for loans Can be used even when mortgaged Company can bid competitively for projects If there is an abundance of resources, especially finance, young organizations will grow Without adequate cash reserves, the company only works for the bank 15
Developing & maintaining a strong work force Company Diversification Geographically & by Products/Services Companies spread across at least two different locations Diversification into more than one service and or product area Company Organization Leadership spanned across two steps of command/hierarchy Responsibility & authority are given to subordinates A path is created for followers to achieve their goals Help in effectively executing its business operations Succession plans – right attitude & work ethos 16
Procure Profitable Contracts 17 Running Pushing until it gives way Rowing –Non Stop Sources: guardian.co.uk; benjaminkarner.worldpress.com
Time to grow, mature & obtain experience Time to grow, mature & obtain experience Adaptability Adaptability Strategies are time related to: - Strategies are time related to: - Economic Conditions Economic Conditions Recessions Recessions Economic Booms Economic Booms 18
It is imperative that SMMEs put clear arrangements in place (success factors) so as to grow & develop successfully, once the door of opportunity opens. Allowing time to grow & mature, & ability to adapt to changing conditions is also important 19 Source: magazine.enlightennment.org
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