If we want SMEs to grow, it’s time to invest in leadership
Authors: Dr Eleanor Hamilton
Dr Eleanor Hamilton, Associate Dean, Lancaster University Management School
11 March 2013
Small businesses are born when enterprising individuals have novel ideas about unique products or services. The growth of the business largely depends on the leaders’ strategic vision and their ability to translate the vision into deliverable initiatives. However, small business owners inevitably struggle to attract and retain top talent, or even move from micro – management of employees to more formal processes and structures. With limited resources, the challenge for the small business leaders is whether to work ‘in’ the business, providing day-to-day management support or ‘on’ the business, providing strategic leadership, to enable growth. If we are committed to the growth of UK SMEs, we need to make a commitment to developing their leadership.
In October 2011, The Business School Task Force was set up by the Department for Business, Innovation and Skills to advise Government on how UK business schools can play a greater role in supporting Medium - Sized Businesses (MSBs) and their growth ambitions. In November 2012, the task force published a report calling for action on better engagement between business schools, MSBs, Government and the wider business community.
One of their recommendations in the report is to adopt a differentiated approach to management development practices within MSBs. Organisational strategies within MSBs are often directly shaped by their owners, so it is important for management development programmes to begin by identifying how and why a firm’s owner has adopted a particular set of organisational practices. One of the programmes that adopts this tailored approach is LEAD. The LEAD programme provides a framework of development for owners to develop and embrace new opportunities as their horizons widen. By providing leaders with an integrated learning model, LEAD has successfully supported SME owners to become confident business leaders who are now working ‘on’ growing the business.
Since 2004, the LEAD programme has already attracted substantial number of small and medium-sized business owners across the North –west and South – west of England. With clear and demonstrable benefits such as 13.8% average increase in growth rate, a £360,000 average increase in annual turnover and 16.8% mean annual employment growth, businesses value the return on their investment from this programme. Chris Creed, MD of Creed Foodservice, who has taken part in the LEAD programme for the South–West said, “Rarely, if ever, in business do you get the chance of unfettered access to someone else’s business and vice versa plus receive unbiased feedback.” This demonstrable impact shows us how important a focus on leadership is to promote growth.
It is exciting to see the expansion of LEAD into London through The Work Foundation, which is hosting an event on the development of management and leadership within SMEs. The event is likely to highlight some more challenges faced by leaders and owners of SMEs. The event will also mark the official launch of the LEAD programme in London from September 2013. If you are an SME owner, register for the event here or contact LEADLondon to find out more about the programme.
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