What can big business learn from SMEs?
- 05 December 2016
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It’s no secret that many great innovations have small-scale origins. What can SMEs teach big business about innovation in sustainability?
Being nimble, creative and entrepreneurial are what make small and medium-sized businesses so pioneering in many aspects of marketing – and this is just as true for sustainability.
While larger organisations may be those making the headlines, often it is SMEs that are first to harness the power of incorporating more ethical strategies to unlock opportunities for their business.
In our latest Special Report 'Marketing Sustainability', we spoke to three SMEs to find out how they used sustainability to create new business and marketing opportunities.
Richard Clothier, managing director of the multi-award winning Wyke Farm, is renowned for pioneering practices that can inspire bigger business. All energy used, for instance, comes from both solar and biogas, and the farm's workers are continually being challenged to come up with new, sustainable innovations. Clothier says: "A lot of corporates that I speak to, particularly efficient ones that are good at lean manufacturing models, struggle with the concept of sustainability. There is often a myth that it will cost more or complicate the business.
"But SMEs like ours show that if you develop things incrementally, if you're authentic and are prepared to invest in a sustainable model, you can grow the business and make it more appealing to customers.
"The reality is that when you adapt the marketing strategy so that sustainability is at its core, the net positive impact becomes more apparent. It can actually yield savings and efficiencies that you would never achieve using a lean manufacturing strategy alone."
By collaborating with larger organisations, SMEs can also gain an advantage over their rivals. One successful example of this is Falcon Coffees.
"We're absolutely boxing above our weight," says Falcon's chief executive Konrad Brits, "and it's down to our sustainability and collaborative approach."
It's an approach that shows why, if SMEs take sustainability seriously, business growth can be rapid. First, Falcon attempts to intimately understand the local needs of its own supply chains. Then it offers appropriate assets that might assist local farmers, through access to packaging and transport partners, for instance. That way, Falcon can differentiate from its rivals by creating greater operational resilience.
It also enables the company, unlike larger corporate rivals, to be more easily viewed as part of the solution rather than a business purely focused on profit. The lesson for SMEs is stark – authenticity is key, and it can leverage you significant advantage over global rivals. Falcon, for example, has beaten both Starbucks and M&S to creating business relationships with several small suppliers.
Brits adds: "Everybody is selling coffee now. It's no longer about what you sell, but how you deliver it. That's key for marketers. You need even more than just great customer service to survive. Authenticity and purpose are more than buzzwords to a millennial audience. Sustainability has become the digital – against the unsustainable analogue business models of the past. And SMEs can lead the way."
Páramo Directional Clothing
Research and development can be tough to justify in the SME market, and even more so when the goal is to do the right thing for the plant rather than make a direct profit. But Páramo Directional Clothing is a perfect example of how trying to differentiate through smart investment can reap dividends.
It allocated significant resources to develop a water repellent that was free of polyfluorinated compounds (PFCs) for its high-peformance outdoor wear. Almost all other brands using membrane and laminate fabrics rely on PFCs as an easy solution. "We have always been a bit maverick and that's a great way for SMEs to operate," says Páramo's marketing manager Catherine Whitehead. "We take this approach because it matters, not always for pure profit reasons. We set out to show our approach works, and works better. It sets us apart, and that's key for an SME."
Páramo wanted to penetrate the German market further and its marketing team knew that being PFC-free would be a particularly welcome and strong brand differentiator. This new commitment also enabled the company to become the first outdoor clothing firm to commit to Greenpeace's Detox campaign, allowing it to spread its marketing message to a much wider audience than Páramo's alone. The business has also recently attracted exposure by being shortlisted for the Guardian Sustainable Business Awards in the "Bold Move" category.
"SMEs can play it safe," adds Whitehead, "but sometimes the best option is to be brave and bold."Back to all