Mid-market enterprises (MMEs) – organisations that are neither too small to be called startups, nor too large to be in the league of the big-guns – are faced with a unique set of challenges with little support in an increasingly competitive economic environment. While the precise definition of MMEs varies in different regions and geographies – some define it based on revenue and others on the number of employees – the method of categorisation does not significantly alter the list of those who fit the bill or their hallmark traits. We define MMEs as organisations with revenues in the range INR 500-2000 crore.
In the Indian context, the Next 500 companies qualify as MMEs according to our definition, a good fraction of which is set to be India’s next titans. These organisations are spread over a vast variety of sectors such as consumer goods, chemicals, textiles, industrial goods, manufacturing, IT, financial services, electronics, pharmaceuticals, construction materials and many more.
MMEs are the unsung economic heroes who have not only managed to survive, rather have thrived in rocky economic landscapes. These fast-growing organisations form the backbone of our entire economic system. Defying all odds, MMEs are posting higher growth rates than small and large-scale organisations and are geared up to become the giants of tomorrow.
According to a report by Forbes, 3 out of 4 mid-market executives claimed that their organisations are on a steady path for continued revenue growth owing to their concerted efforts on the lines of innovation, sales and marketing as well as leveraging technology to unlock value.
In India, MMEs directly or indirectly contribute in excess of 42% of India’s GDP and are a major growth driver of the Indian economy. They support the local population by providing employment to the masses. About one-tenth of sales by Indian MMEs are exported, suggesting that the vast majority of the output is used to satisfy domestic demand. However, only one in six MMEs is publicly listed. Financial services, consumer goods, auto, healthcare, logistics, entertainment, hospitality, technology, metals are some of the thriving sectors in the mid-market segment in India.
One might be curious to understand how the MMEs are so optimistic about their growth and continue to deliver consistent output even when their smaller or larger counterparts fail to do so. For one, their peculiar size is what makes them special and empowers them. Being relatively larger than small companies allows them to have deeper pockets for weathering difficulties, funding innovation and hiring key talent. Whereas their relatively smaller size compared with larger enterprises makes them more agile, establishes proximity to customers and enables them to retain a bit of that entrepreneurial spirit.
The key areas where MMEs outperform upcoming startups and established large-scale organisations:
I. Deep focus on customers
MMEs understand the value of customer relationships and focus their resources to keep themselves close to their customers to cultivate a meaningful relationship. In return, customers are also happy to be in touch directly with the team that is getting their task done. On the downside, their attempts at getting to know their customers at a deeper level end up restricting their customer base, which puts the organisation under threat, if a few top customers decide to walk away.
II. Change with the times
Despite a large fraction of MMEs being family-owned or traditional set-ups, they are extremely receptive to the needs of their customers. They are cognizant of the fact that customer needs and personas evolve with time, and they must be willing to course-correct in order to thrive in this dynamic scenario. Be it altering their strategy or completely changing their business model, MMEs are game for it if that is what keeps them close to their customers.
Easy access to decision-makers speeds up the process of change and innovation by cutting out bureaucracy and politics. Agility is built into the system, thanks to proximity to customers and swift decision making, such that strategies, business models as well as new product & service lines are co-created with end-users.
III. Organisation culture to win
Not only do MMEs value their clients dearly, but they also hold their employees in high regard. By virtue of their size, they are able to build a positive culture that encourages team spirit and excellence of the employees and the organisation as a whole. Employees and leaders chase common goals to build a thriving culture in the organisation.
There is a lot to learn from these hidden gems, but they also come with their fair share of challenges that aren’t as prevalent in small or large scale organisations. Not only do MMEs have unique personality traits, their business battles are also unconventional. Most of their challenges arise from the fact that they are big, but not quite big enough.
BOD solves big problems of mid-sized organised to help them tread the path to become large. As a partner for scale, BOD understands the key bottlenecks in the growth journey of MMEs and co-creates winning strategies to help them overcome the hurdles.
If you are an MME that is looking to achieve next-level growth and unlock shareholder value, write to us at firstname.lastname@example.org for a free consultation!
This article was originally published at BOD – https://bod.consulting/beating-the-middle-child-syndrome-for-mid-market-enterprises/