CEO Tool 3: 5 Star Model from A small or middle enterprise to a big enterprise

Moving from a small or middle enterprise to a big enterprise requires careful planning, strategic decision-making, and effective execution. Here are some key steps that the CEO of a small or middle enterprise can take to move their business towards becoming a big enterprise as sales exceed RM 100 Million per year:

Define a clear vision and strategy: The CEO should define a clear vision and strategy for the business that outlines the long-term goals and objectives of the organization. This involves identifying the markets, products, and services that the business will focus on, as well as the key strategies for achieving growth and profitability.

Build a strong organizational structure: As the business grows, the CEO should build a strong organizational structure that supports its strategic goals and objectives. This involves defining clear roles and responsibilities for each position, developing effective communication channels, and ensuring that the right people are in the right positions.

Invest in technology and innovation: To support growth and competitiveness, the CEO should invest in technology and innovation. This involves identifying and adopting new technologies, systems, and processes that can improve efficiency, productivity, and customer satisfaction.

The 5-star model can be a useful framework for the CEO of a small or middle enterprise who wants to move towards becoming a big enterprise as sales exceed RM 100 Million per year. Let's take a look at how the steps outlined above can be applied to the 5-star model:

1. Strategy: The CEO should define a clear vision and strategy for the business that outlines its long-term goals and objectives. This involves identifying the markets, products, and services that the business will focus on, as well as the key strategies for achieving growth and profitability.
2. Structure: As the business grows, the CEO should build a strong organizational structure that supports its strategic goals and objectives. This involves defining clear roles and responsibilities for each position, developing effective communication channels, and ensuring that the right people are in the right positions.
3. Processes: To support growth and competitiveness, the CEO should invest in technology and innovation. This involves identifying and adopting new technologies, systems, and processes that can improve efficiency, productivity, and customer satisfaction.
4. People: The CEO should foster a positive organizational culture that supports the values and goals of the business. This involves developing effective communication channels, recognizing and rewarding employee performance, and promoting a collaborative and inclusive work environment.
5. Culture: To ensure that the business is on track towards becoming a big enterprise, the CEO should monitor and measure performance against key metrics such as sales, profitability, customer satisfaction, and employee engagement. This involves developing effective reporting systems and using data analytics to make informed decisions.

By implementing the 5-star model, the CEO can evaluate and improve their organization's performance in each of the five key areas. This will help them to build a strong foundation for growth and competitiveness, and position the business for long-term success and growth as sales exceed RM 100 Million per year.

Focus on customer satisfaction: As the business grows, it's important to maintain a strong focus on customer satisfaction. The CEO should develop effective customer service strategies and ensure that the organization is responsive to customer needs and feedback.

Expand the business: As sales exceed RM 100 Million per year, the CEO should consider expanding the business into new markets or geographies. This may involve acquiring new businesses, developing new products or services, or establishing new partnerships or joint ventures.

Foster a ositive organizational culture: To support growth and success, the CEO should foster a positive organizational culture that supports the values and goals of the business. This involves developing effective communication channels, recognizing and rewarding employee performance, and promoting a collaborative and inclusive work environment.

Monitor and measure performance: To ensure that the business is on track towards becoming a big enterprise, the CEO should monitor and measure performance against key metrics such as sales, profitability, customer satisfaction, and employee engagement. This involves developing effective reporting systems and using data analytics to make informed decisions.

Overall, the key to moving from a small or middle enterprise to a big enterprise is to focus on building a strong foundation for growth and competitiveness. This involves developing a clear strategy, investing in technology and innovation, expanding the business, and fostering a positive organizational culture. By following these steps and monitoring performance closely, the CEO can position the business for long-term success and growth.

There are several challenges that business persons in Asia may face when attempting to change their company from an SME to a big enterprise. One major reason for this is the mindset of management and company culture, which can be deeply ingrained and resistant to change.

Some specific challenges that may arise include:

1. Risk aversion: Many SMEs in Asia are family-owned and operated, and the owners may be hesitant to take on the risks and challenges associated with scaling up the business. This can be due to a fear of failure or a desire to maintain control over the company.

2. Lack of talent: As SMEs grow, they may struggle to attract and retain the talent they need to support expansion. This can be due to a lack of resources or a lack of experience in managing a larger workforce.

3. Resistance to change: SMEs may have a deeply ingrained company culture and way of doing things, which can be resistant to change. This can make it difficult to introduce new processes, technologies, or strategies that are necessary for scaling up the business.

4. Financial constraints: Scaling up a business requires significant investment in technology, infrastructure, and talent, which can be difficult for SMEs to finance. Many SMEs in Asia may struggle to access capital or may be hesitant to take on debt.

5. Regulatory barriers: Some industries in Asia may be highly regulated, making it difficult for SMEs to comply with the necessary regulations and expand their operations. This can be especially challenging for businesses that operate across multiple countries or jurisdictions.

To overcome these challenges, business persons in Asia may need to shift their mindset and company culture to be more open to risk, change, and innovation. They may also need to invest in talent development, technology, and infrastructure to support growth and competitiveness. Additionally, they may need to build strong partnerships and networks to navigate regulatory barriers and access capital.

To shift the mindset and company culture to be more open to risk, change, and innovation, business persons in Asia can consider the following:

1. Emphasize a growth mindset: Encourage employees to embrace challenges and learn from failures, rather than viewing them as setbacks. Create a culture of continuous learning and improvement.

2. Promote innovation: Encourage employees to think creatively and identify new opportunities for growth and expansion. Set aside resources and funding for research and development.

3. Foster collaboration: Encourage teamwork and collaboration across departments and functions to foster cross-functional learning and innovation. Break down silos and encourage knowledge sharing.

4. Lead by example: As a business leader, model the behaviors and attitudes that you want to see in your employees. Be willing to take calculated risks and embrace change.

To invest in talent development, technology, and infrastructure to support growth and competitiveness, business persons in Asia can consider the following:

1. Develop a talent strategy: Identify the skills and competencies that the business needs to succeed and create a plan to develop and retain top talent. Offer training and development programs to help employees grow and acquire new skills.

2. Invest in technology: Identify the technologies that can help the business operate more efficiently, improve customer service, and drive growth. Evaluate new technologies and implement those that offer the most value.

3. Upgrade infrastructure: Invest in the physical infrastructure that the business needs to support growth and expansion, such as warehouses, distribution centers, and IT systems.

To build strong partnerships and networks to navigate regulatory barriers and access capital, business persons in Asia can consider the following:

1. Join industry associations and trade groups: Network with peers in the industry to learn about best practices and stay up-to-date on industry trends and regulatory developments.

2. Engage with government officials: Build relationships with government officials and regulatory bodies to understand the regulatory environment and advocate for policies that support business growth.

3. Seek out strategic partnerships: Identify potential partners who can offer complementary products or services, access to new markets, or other strategic advantages.

Business growth and expansion can be an exciting and challenging journey, especially for small and medium-sized enterprises (SMEs) in Asia. However, with the right mindset, strategies, and partnerships, business persons can successfully navigate the challenges and achieve incredible growth and success. By embracing a growth mindset, promoting innovation, investing in talent and technology, and building strong partnerships and networks, business persons can take their SME to the next level and transform it into a big enterprise, exceeding sales of RM 100 million per year. With dedication, hard work, and a willingness to embrace change, the possibilities for business growth and success are truly limitless!