SERVITIZATION SWALLOWS HUMAN RESOURCES

As previously highlighted in this blog series, servitization is a great business opportunity also for a micro-sized company (employs less than 10 persons). However, to be able to servitize, the micro company needs more information and understanding about processes of a customer company. And that takes time. How easy, just use your time wisely!

Lets's take a concrete example. The micro company Suomen Kaapelitarvike Ltd (https://skt-products.fi/?lang=en) employs 3 persons. Its entrepreneur Ilkka Järvenpää has, as an entrepreneur and in his previous work history, accumulated many business contacts with both domestic and foreign large companies (in France, Switzerland, Norway, Panama, Sweden, Germany, Italy).

Typical advice given to Ilkka, of course, is that the contacts should be utilized as soon as possible. And that by exploiting the contacts, there would be significant growth opportunities for the company. We all agree this. Ilkka knows well that he should travel to meet those contacts and neqotiate with them about their needs. But when?

There is one fundamental fact that tends to be forgotten by many advisors, developers and politicians

The smaller the company is, the less it has human resources to do anything other than everyday tasks. There will be no more hours in a day even if the company increases networking or using external experts. Everyday tasks just need to be done. Otherwise the micro company will endanger its existence. The same applies to hiring a new employee. The smaller the company is, the bigger is the risk of recruitment. Also every little administrative task takes much bigger share of micro company´s human resources than of a larger company´s resources.

As seen in picture above, when solo entrepreneur participates in a seminar day, he closes his company for the whole day. In contrast, in a company with 50 employees, 49 employees keep continue working. So, micro company is not just passive even if it doesn´t participate in projects or use services as much as larger companies. Micro company has a chronic lack of time.

To get micro companies involved in servitization to a greater extent, the public system should also servitize its own activities to be able to serve micro companies better. Services should for example be served with smaller pieces and contain more further support.

Ilkka is going to conquer the world, it´s just a matter of time.

Harri Jokela
Business service manager
Nivala-Haapajärvi subregion NIHAK

harri.jokela@nihak.fi

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