Belgian growing pains

Why is growth so difficult?  Much has been said about our national ‘handicaps’: a small domestic economy, high taxes, and an inflexible labour market.  But the opportunities—the quality of our people, our know-how, our location, etc—are equally undeniable.   Indeed, Belgian entrepreneurs are self-critical too.  There is not enough risk taking; not enough grit and vision to take companies to the next level.  Entrepreneurs complain about the ‘culture of contentment’ among the general population, but some reflect that they too were stuck in the comfort zone.  Perhaps it is time to ditch the stereotypes and clichés about our national psyche.  The country’s most successful entrepreneurs certainly don’t fit the profile.

Growing is difficult, that much is clear. Growing is difficult, but growing consistently is even more difficult.  There are a number of factors which inherently limit the growth of enterprises, but it seems as if Belgian companies, most of whom are SMEs, struggle more than our neighbours’ companies in growing into international powerhouses.   At least, that is the perception we appear to have of ourselves.  

Anxiety

In addition to the universal factors that limit growth, a number of typically Belgian factors exist that complicate things that much more.  It is undeniable that Belgium has a small domestic market.  Not only is it small; it is a complex and expensive market to operate in too.  We have a structural ‘handicap.’  But there appears to be more to it.  According to some entrepreneurs, we lack some basic entrepreneurial skills or attributes.  For example, according to some we Belgians are notoriously risk-averse.  We don’t like taking risks financially and will seldom see the need to elevate our company beyond its comfortable rhythm.   

Sure, there isn’t enough venture capital.  But external capital is intimidating, as is the expertise that others could provide to accelerate growth.  Nor is Belgium a country of big creative thinkers or innovators.  Everything that is needed to grow and continue growing exists, but always seemingly to a limited degree.  Taking it to the next level is not as easy as it sounds.  Listing your SME on the stock market is easier said than done.  Cooperating with others in any way is difficult for the Belgian entrepreneur. Paranoid dread of interference runs in our blood. An acquisition may offer, but that implies bringing in external capital, with all its inevitable consequences. Blaming these growing pains on government—for example, on the inflexibility of the labour market, the fiscal framework, the lack of harmonised regulations, etc—is a frequent justification.

Entrepreneurship

Yet the route to growth isn’t simply a matter of government policy.  It’s about entrepreneurship.  It’s about participating in growing markets, instead of declining markets.  The green economy is booming, but how many entrepreneurs have fully embraced its implications?    

It is about internationalisation.  Obviously, every company must work out its own strategy but are Belgian companies pursuing international markets aggressively enough?  It is, after all, one of the ways to leverage our expertise and resources and hence to overcome the restrictions of our small market. Taking on an export manager is a safe option. Setting up one’s own sales offices is sometimes a logical next step. A few companies follow their clients abroad. By doing that their income flow is partly guaranteed. Embedding yourself in the local market where you want to sell your goods, however, is a lot more aggressive and ambitious. Take companies like Bekaert and Melexis, which have invested not only in production sites abroad but have also set up R&D centres in the Americas and Asia.  In a way, that is also the course that Electrawinds is following, but smaller companies like ServerCheck and Playfish (not a Belgian company, but co-founded by a Belgian) are going the same way quite vigorously.  Centralising the know-how of the parent company in one place is gradually becoming part of a parochial mentality.  

Entrepreneurship is also about taking the company to a next level of growth.  Many of our family-owned SMEs have problems with succession.  Too often, this results in the company being swallowed whole by international groups because there is no succession plan, no commitment for growth, no capital.  Too often we appear to lack the courage to take companies to the next level.  Those who are prepared at such times to bring in external management and capital through a listing or private equity might be on the road to an acquisitive growth strategy instead of falling prey to acquisition. Governance remains a tricky issue in the development of a growing organisation.

Rebellious passion

Creativity too is an important driver of growth.   Hence, creativity needs to be stimulated more.  But that does require a particular work environment, because an organisation that is governed purely by structure and rational strategy restricts the passion of creative people. The role of the CEO cannot be underestimated in this context. If you’re a bit of a rebel yourself, you also stir up that bit of rebelliousness in your people.  It then becomes acceptable for passion to trump strategy, obviously within the structure of a well-functioning organisation. Creativity acknowledges no anxiety and is therefore an answer to many restrictive factors in our ‘psyche’.  Daring to innovate goes hand in hand with daring to fail.  Being unsuccessful doesn’t matter, the risk of failure is inherent in innovation, but putting all one’s eggs in one basket is unwise. Spreading one’s bets is a safe choice.  Teamwork is crucially important in this context. An ordinary idea can develop into a major success if it is carried and supported by a strong team. Getting up after falling, after all, is easier if you have an arm to lean on.

The future

Isn’t it time to look at ourselves? True, the government must do its bit.  Quite simply, this country should be a better place to do business.  Other factors, like the small domestic market, we can’t do anything about.  But the potential for growth does exist; and that potential is probably greater than what we manage today.  Ultimately, it’s the entrepreneurs themselves that drive growth; at their companies, and indirectly in the economy at large.  That’s quite a responsibility.  Heft in hand, therefore; away with those clichés.