SME event: Supporting SME owners to become SME Leaders
15 March 2013
The importance of leadership skills for SMEs seems to have fallen off the government’s agenda in recent years, but this week, at The Work Foundation, we heard from those who support the need for a more holistic approach to developing SMEs. The event brought together a multi-stakeholder panel with a diverse range of views to discuss management and leadership in SMEs, asking what skills SME owners need in order to grow their businesses, generate employment and increase productivity.
Lord Young spoke about a revolution taking place. The number of SMEs has risen rapidly in recent years, from two million in 1990 to just under five million today. This revolution cannot be ignored by the government as these small businesses need the right support, skills and people to grow and generate employment. Answering questions on what he sees as the government’s role in helping and supporting SMEs, Lord Young expressed some skepticism about ‘accelerator’ programmes but emphasised the important role that business schools can play in up-skilling managers after their start-up phase.
Sharing his personal journey of becoming an ‘accidental entrepreneur’, Rajeeb Dey, founder of enternships.com, talked about his experience of entrepreneurship as ‘jumping off the cliff and assembling the plane on your way down’. Rajeeb set up enternships.com in 2009 and has only recently started thinking about the issue of leadership as a result of the growing size of his team. As a young company, enternships.com’s employees are focused on self-development and continuous learning; however, as a leader, Rajeeb admits that young entrepreneurs need more support to develop leadership skills. It was, he said, a constant struggle finding the time to step outside of his business to take advantage of the support available.
Drawing on the Small Business Survey research conducted by the Federation of Small Businesses (FSB), Mike Cherry said, one of the main barriers to growth within SMEs stems from owners being ‘too wrapped up in the day-to-day running of the business’. FSB research shows that SME owners who do take up advice and support are likely to grow their businesses more than those who don’t. However, it is important for this support to be tailored to each SME leader and their specific business. A one-size-fits-all solution is not the answer.
Speaking ahead of the publication of the Small Business Task Force report, Toby Perkins MP, Shadow Minister for Small Business, highlighted the need for more medium-sized businesses in order to grow the UK economy. One of the main challenges faced by a small business owner en route to becoming a medium-sized business owner lies in the shift from doing everything themselves to trusting other people’s judgement and recruiting the right people for the right roles. He also expressed that moving from managing one person to managing a team of 15 people demands a different set of skills from a leader. As part of this agenda, he is building a case for a more collaborative approach between government, policymakers, academics and small businesses.
Fiercely defending the role played by UK business schools in supporting SME growth, Dr Ellie Hamilton, Associate Dean at Lancaster University Management School, delivered two key messages to all those providing SME support and those accessing this support. The first message was to ensure that any programme of support draws on extensive research carried out on small businesses and specifically the learning styles of SME owners.
Drawing on the work being done by Lancaster University Management School’s Institute of Entrepreneurship and Enterprise Development, Ellie focused on the LEAD programme as an effective intervention. This is based on an integrated learning model that has been proven to deliver measurable results.
Her second message was to evaluate the impact of SME support programmes. Drawing on the findings from the LEAD programme evaluation, she highlighted its effectiveness in developing leadership skills and confidence among SME owners, to put them on the path to growth. SME owners who have participated in the LEAD programme have reported achieving an average annual growth rate of 13.8%, despite the recession.
There was a general consensus from the event that further leadership skills support for the SME owner community will result in a positive impact on growth. This support is particularly relevant for small businesses on the road to becoming medium-sized businesses. Moving away from the day-to-day running of the business to providing strategic direction requires SME owners to change their focus, and an effective intervention can support them to do this.
The LEAD programme will be delivered through The Work Foundation from September 2013. To learn more about LEAD, contact LEADLondon@theworkfoundation.com