SMEs should look to the future by nurturing those within the organisation, even when funds are tight, says Ian Gordon, programme director of LEAD 2 Innovate.
Banks and small businesses have always been odd bedfellows. In a very different post-recession world our collective view of banks and their attitude to funding Small and Medium Sized Enterprises (SMEs) has shifted, and possibly not for the better. Management development should be on your mind as a small business.
Often this is highly justified. Recent figures from the Bank of England show that a key Government scheme, the Funding for Lending Scheme, is failing to ensure SMEs are getting access to loans that will help businesses to grow. In the same vein, a recent survey by Aviva showed how SMEs are missing out on key sources of funding as a third of SMEs don’t know what alternative funding is available, and how to take advantage of it.
When funding is tight, it is often tempting for business owners and managers to cut back spending in areas that do not provide immediate tangible benefits to cash-flows.
One area that can often fall by the wayside is investment in managers and leaders themselves, despite significant evidence that demonstrates the high returns on a relatively modest investment management development programmes can bring. This is because leaders, equipped with the right skills and knowledge, can bring significant value to their organisations. Indeed, Roffey Park’s Management Agenda has shown that 9 out of 10 HR Managers identify leadership development as key to business performance.
It’s a difficult time for SMEs. Things have always changed with the tide and it’s always been the case that having a culture of change should be the default position for most organisations. However, the rate of pace of change and the relationship between different aspects of a business seems to be increasing and in a constant state of flux. The adoption of technology, the internet of things, Red Ocean or Blue Ocean strategies, business plans or business models; how do you make sense of all of these things?
It is increasingly essential in turbulent times for business leaders to be able to lift their heads up to horizon-scan, and spot opportunities for growth and innovation.
University management schools are one of the few organisations that are built on trust, and with no alternative agenda other than to help you and your business development. The role that universities, and their management schools, can play in the economy – and particularly with SMEs has been highlighted by several government-backed reviews and initiatives, such as Sir Andrew Witty’s ‘Encouraging a British Invention Revolution’.
This summer Lancaster University Management School was one of only three establishments to be classified as Gold standard by the Royal Charter for small business engagement. This is a new charter inspired by Lord Young on behalf of the Prime Minister that independently measures the effectiveness of management schools at supporting SMEs.
Lancaster’s challenge to SMEs owner/managers is for them to spend just one day per month working on their business, rather than in their business.
Lancaster is re-launching its LEAD programme for SMEs under the new brand name of LEAD 2 Innovate. This programme integrates active teaching with practice, regularly encouraging participants to relate what they are learning to their own situations, and supporting them through coaching and action learning to apply their learning to their own businesses.
Additionally, it draws on the personal experiences and knowledge of participants, enabling them to learn from one another. It also places a high emphasis on ingraining innovation and an innovative culture within businesses so they can adapt more easily to fast-changing environments and markets.
Participants have improved leadership skills with a broader awareness of the challenges facing SMEs. Participants also report a huge increase in confidence and feel more confident to face the emerging opportunities that arise from the external environment. A lot of this is achieved because they have improved their ability to delegate and network with like-minded people.
Other business schools across the UK are also providing their own courses and their cost-effectiveness means they can provide an excellent route to growth when the banks are not forthcoming and more costly investments have to be shelved.
When budgets are tight businesses are right to prioritise their spending, but investments in the skills of their leadership teams, so that they themselves become the drivers of innovation, should remain high on that list.