As SMEs around the North West look to rebuild from the coronavirus shutdown, Professor Sue Smith from the University of Central Lancashire’s Centre for SME Development explains the key steps small and medium sized business owners need to take to help boost their recovery.
Without exception, this unprecedented pandemic is a major disruption to business for SMEs.
We know that in the North West, around 70 per cent of SMEs have furloughed their staff, in line with the national picture. Information and advice from the Government changes rapidly and it is important that SMEs keep abreast of the changing developments. SMEs are vital to the economy and the fabric of society, accounting for 99 per cent of all businesses, and playing a key role in the country’s economy, employment creation and innovation.
Here, the Centre for SME Development at the University of Central Lancashire (UCLan) outlines what you can do to survive, increase your productivity and even grow. But just like the diversity of the SME sector and the fiscal responses, the advice in this article is not one size fits all but the concepts should apply to everyone.
CLEAR principles will support a return to growth
To help Lancashire SMEs survive the crisis and begin to move into recovery mode, the message is be CLEAR: Communication, Leadership, Enterprising, Agility, Resilience
Communication and leadership are more important than ever. You may have hundreds of staff, only a handful or operate as a sole-trader, however research consistently shows that deficiencies in leadership and management skills are a key constraint on SME performance - three quarters of SMEs do not provide leadership development for their staff.
Conversely, research from the Organisation for Economic Co-operation and Development (OECD) proves that good leadership and management in SMEs has positive impacts on productivity and profitability. Business owners should spend this downtime developing better leadership skills and communication. If you are remote working and doing video calls or socially distant at work, put on a brave face and lead. That doesn’t mean you have to pretend; be authentic, or as one pundit says, “be human, not humanoid”.
One of the most effective tactics in developing leadership competence is to become a 'reflective practitioner'. Try to reflect every day. Write your reflections down even if it is simply to answer these two questions; what am I proud of today and what could I do better tomorrow?
Be brave, be visible and communicate.
High performing leaders stay on message and relay the vision and how everyone’s role is crucial in getting there. Your teams will be looking to you for guidance and strength. This applies to your customers and your supply chain.
Remember, leadership isn’t just the person or people at the top. Leadership exists throughout all levels of any organisation; it is called distributed leadership. SMEs which recognize the importance of distributed leadership throughout their teams, on the whole, outperform those which rely on a ‘heroic entrepreneur.’
"We all have leadership responsibilities and they all require the need for clear communication."
Focus on enterprise, agility and resilience
Now, more than ever, you need to be enterprising, agile and develop resilience. Now is the time to put these at the forefront of your mind and think through what these mean for you and how you will continue to maximise these skills which all overlap.
Being agile is about being creative and research shows that leaders who foster conditions for creativity are more likely to be enterprising, agile and resilient. This can be the difference between survival or collapse, or stagnation and growth.
Being agile is about leveraging relationships, focusing on what’s truly useful and continually adapting based on your customers’ and staff’s needs. Be open to new ways of working and new ideas.
Although things are changing quickly, being resilient is about the business flexing and adapting to deliver your product or service to customers safely. It is also about being resilient in terms of mental health and wellbeing for you and your staff and being innovative.
Learn from others
The best thing SME leaders can do is to learn from others. Our research demonstrates that SMEs who engage with social learning and reflective practice are three times more likely to grow and become successful than those who don’t. Look at businesses and leaders different to your own and see what they are doing. Learning how not to do something is just as valuable, it may be that you can also learn what is not right for you.
Put yourself in situations where you are learning. If you have staff, speak to them, they may have creative ideas and solutions. If your staff are furloughed, have empathy; they are your biggest asset. Keep in contact - they all have a role in the development of the business being enterprising, agile and resilient. Learn from them. It is also prudent to listen to your customers and try to address their needs and learn from them also. If you haven’t already done this, ask your customers what they want from you.
Free membership benefits SMEs through Covid-19 and beyond
A strong way to learn from others is to join a network of business leaders with similar concerns and different experiences. The Centre for SME Development brings together hundreds of small and medium sized businesses from across the region, with access to a wealth of information and support including leadership development, internships, student placements and access to Boost growth business support in the county. In addition, members enjoy free access to supportive shared networks.
Additionally, as business owners understand how the relaxing of lockdown restrictions affects each company and sector differently, the Centre for SME Development brings companies together to give a stronger voice to Lancashire’s small business sector, informing regional and national economic policy so that we can shape recovery packages in the region.
Membership to the Centre for SME Development is free and can be accessed all year round – whether your company is in survival mode or looking at recovery. To find about joining the Centre email sme@uclan.ac.uk or call +44 (0)1772 894321.
Professor Sue Smith is the Chair of the Centre for SME Development and has an extensive track record of university business engagement. Her work has involved running many leadership development programmes and she has trained other institutions across the UK on how to develop leadership capabilities in small and medium sized businesses (SMEs).