New Normal is a phenomenon that was first associated with the 2008 global financial crisis that witnessed a profound disruption and social unrest across the world but the contemporary New Normal occasioned by the prevailing COVID 19 Pandemic to caused to total global socioeconomic short-down can be said to have spectacularly impacted the world in a more dramatic and disruptive dimension that may have permanently transformed the world.
Historically, global disruptions are usually triggered by crisis that forces monumental changes in global economies and businesses.Generally speaking, a New Normal refers to what becomes as an acceptable norm consequent upon a crisis that differs from the situation that existed prior to the crisis.
Global crisis that instigates monumental social, economic and business disruptions usually compels business organisations to click the reset button, reboot, upskill, reskill and embrace the new normal if they must remain not only relevant in the New Normal era but to thrive to overcome the dynamic and complex demands associated with the new era.
Predictably, whenever economies and businesses experience a big disruptive upheaval, there’s often shift in how businesses operate and effects transactions.
Micro, Small and Medium Enterprises otherwise referred to as MSMEs remains the catalysts and drivers of the economies of nations.The development and growth of MSMEs and their resilience to overcome critical growth challenges occasioned by major disruptions as in the case of COVID 19 Pandemicdetermines the space of economic recovery and sustainable growth.
MSMEs are defined and classified in terms of number of employees, total assets and annual turnover. The contributions of MSMEs to the development of the nation’s economy is well acknowledged and established. MSMEs are the growth engine of any economy contributing to its development in terms ofdriving innovations, generating wealth, reducing poverty, combating hunger and creating jobs as well as the GDP.
According to the World Bank, MSMEs represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. Also, according to SMEDAN/NBS MSME survey,MSMEs contribute nearly 50% of the country’s GDP and account for over 80% of employment in the country.
Ordinarily, MSMEs are known to struggle with innovativeness, proficiency, productivity and competitiveness being the hallmarks of a functional enterprise. Apparently, the profound complexities associated with doing business in the 4th industrial revolution triggered by the prevailing COVID 19 Pandemic that has refused to relent has thrown up even more complexities and placed intriguing demands on MSMEs to catch up with if there must remain in business or to disappear completely.
Because of typical internal operational weaknesses and competitive inefficiencies among other external challenges,MSMEs are not only vulnerable and susceptible to sudden shocks and oftentimes, lacks the capacity to contain with radical disruptions as exemplified by the impact of COVID 19 Pandemic.
The impact of COVID 19 Pandemich as admittedly radically disrupted and rapidly transformed the ways and means of doing business across world with unique and defining characteristics.
Expectedly, quite a number of MSMEs has gone under and may never rise again but the once that have survived have a responsibility to rethink and rejig their business models to conform with the demands of the prevailing circumstance. Interestingly, on the flip side, there are indications of business organizations that have taken advantage of COVID 19 Pandemic to innovate and scale exponentially.
Apparently, though the dynamics that stimulates and determines the effective contributions of MSMEs is on the larger part determined by the deliberate impact orientated policies that facilitates ease of doing business as well as the support mechanisms to rapidly reflate the economy but the burden of rebuilding and repositioning remains the responsibility of the enterprise operators.
The disruptive impact of COVID 19 Pandemic on the global economy since the year 2020 has not only compelled nations of the world to begin to formulate policies and strategies to reflate and stimulate rapid responses to fostering accelerated rebound of their respective economies with MSMEs leading the charge.
The New Normal is characterized by virtual engagements,the phenomenon of working remotely, leveraging technology to learn new skills, new ways of acquiring and retaining customers, developing and managing effective integrated marketing and communication channels as well as effective ways of delivering products or services online, real time.
The New Normal has undoubtedly influenced the evolution of innovative in e-commerce and logistics Value Chains which has now become the mainstay and integral components of product and service distribution and delivery. Another unique characteristic of the New Normal is the fact that there is a dramatic shift in the orientation, perception, preferences and buying power of the consumers of products and services.
Businesses are characteristically the biggest creator of value. Given the shift in consumer perception and preferences, if MSMEs must build back better, then focus must be on building a business the Truly Human Way.
Truly Human Businesses are organizations designed to elevate the human experience through products and service that create the economic engine to power the cause it is advancing.
Responding to this paradigm shift involves Design Thinking. According to Tim Brown, Design Thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.Design Thinking is anchored on three Pillars comprising of Desirability, Viability and Feasibility.
Design thinking is a process for solving problems by prioritizing the consumer’s needs above all else. It relies on observing, with empathy, how people interact with their environments, and employs an iterative, hands-on approach to creating innovative solutions.
The argument for the concept of Design thinking is created with the perception that big corporation lack the ability to be creative and on extreme cases, aren’t able to create new products and services that meet unmet needs of their customers.
Apart from the prevalent infrastructural deficit that of course constitute critical drawbacks for MSMEs, characteristically, a critical mass of MSMEs are known to lack therequisite skills and the capacityto run businesses. This is because available facts indicates that most MSMEs lack corporate governance, systems, process and procedures that guarantees functional enterprise growth and sustainability.
Apparently, the emerging profound demands on MSMEs to rebound and reposition their businesses as the result of the disruptive impact of COVID 19 Pandemic has ostensibly further compounded the challenges of MSMEs.
It is established that requesting MSMEs to pay adequate attention anything other than their core business focus constitutes a major distraction. To address this gap, enterprise operators rely on recruitment of employees to provide operational business support but again, evidence shows that there is a very high level of labour turnover with MSMEs due to the widespread lack of capacity of employees.
Due to a number of obvious factors, access to funding for MSMEs to grow and expand their business remains a daunting challenge. The global total shutdown as a result of COVID 19 Pandemic in 2020 has made matters even worse for MSMEs to raise funds to invest in the recruitment of highly inspired, smart and competent employees, training and capacity development or to procure the much desirable business development support services.
Beyond public sector and development organizations funded intervention programmes,the emerging development is an opportunity for Business Development Service Providers (BDSPs) to innovate ways of providing an incentive based private sector led, market oriented and demand driven Business Development Services to inspire MSMEs to procure impact oriented private sector led Business Development Services.
It is safe therefore to say that though the challenges for MSMEs to do business in the New Normal era may be more complex, MSMEs must find a way to navigate their way out of the prevailing difficult upheaval.
The good news however is that there are emerging inspiring business opportunities in the New Normal era and obviously, the future is bright for MSMEs that can dare to weather the storm.
Dr. Peter Ayimis an Enterprise Development Expert and Principal Consultant/CEO, MSME Business Development Services Limited
