Small and medium enterprises (SMEs) are the growth engines of most world economies.
In sub-Saharan Africa, they account for up to 90 percent of businesses and employ the bulk of the working population, making a sizeable contribution to poverty reduction and economic growth across the continent.
In Kenya, micro, small and medium enterprises (MSMEs) account for 80 percent of employment and contribute over 92 percent of new jobs created annually.
SMEs also generate jobs for individuals not well-served by large organisations. Adpack Limited, for example, has multiple deaf and hard-of-hearing employees on the factory floor.
In the context of a country with an unemployment rate of 39.1 percent, the majority of the unemployed fall into the youth category.
While larger companies tend to shy away from employing fresh graduates, believing they lack specialised skills and experience, SMEs are embracing the youth. Odyssey Capital, for instance, has an average employee age of 30.
Supporting SMEs, then, helps strengthen the local economy, promotes accessibility and job creation in underserved demographics, and supports the Kenyan economy as a whole.
The difficulty, however, is that small and growing businesses often lack the resources and resilience to navigate a difficult economic climate.
Where larger organisations have more scope to restructure, SMEs are often constrained by their size, with a lack of the breadth of business experience you find in a big business.
If, then, SMEs are the backbone of an economy, how can they protect themselves during an economic downturn, and ride out the storm as their larger competitors might? One example is a recent executive coaching programme involving 10 SMEs in Kenya.
It was devised by international experts in human capital, delivered by Kenyan executive coaches — and designed to support small businesses and give them the skills, tools, and resilience to grow and develop in spite of economic distress.
From 2017 to early 2018, Kenya was going through political crises that, in turn, led to a severe and sustained slowdown of the economy.
Despite this, the 10 businesses that engaged in the coaching programme were, on average, able to report increased revenues and employment. In fact, 45 new jobs were created in 2017.
Unlike many larger companies, SMEs often lack access to finance and the knowledge and resources required for growth, which can limit their ability to have as strong an impact on their local communities and the wider business landscape.
Programmes such as executive coaching offer a tool to help businesses fast track their growth.
They allow the SMEs to step back and think about their way of doing things holistically, rather than growing in a piecemeal way in reaction to crises or immediate needs.
They help leaders understand the basis for growth, implemented in a way that works for their specific business.
As each business grows and develops, more jobs are created, more young people are employed, and more stability is introduced to the local business landscape. SMEs that can withstand economic disturbances create opportunities.
Fiona Nyong’o is a consultant; Glynis Rankin is CEO, Creative Metier