It is critical, as a small business leader, that you cultivate a robust management team. It is your managers who will lead your firm day-to-day, spearhead its growth operations and ultimately steer your company towards success. But a new study indicates that poor management skills are a problem for many UK-based small to medium sized enterprises (SMEs), impeding their growth prospects. Turner Little reports.
Plotting courses
We would advise you to write a business plan, if you decide to launch a new company. You can use this document to lay out your vision for your venture, as well as detail how you plan to make these ambitions a reality. A business plan is invaluable, as not only does it show potential investors why it would benefit them to take a chance on your firm, bringing start-up capital, but it also allows you to prepare for future growth opportunities, so when they arise you can take full advantage of them.
There are a range of elements you should include to create a sound business plan. One we would advise you to include is your management responsibilities, so your investors can see that your firm will be led by a strong team. You may want to detail factors such as your managers’ qualifications, experience, budgets and deadlines. This is also a good time to outline the skillsets your managers will need to lead the company daily and helm growth initiatives, so you can hire the appropriate personnel.
Skills crisis
But it seems that the UK’s SME community is currently facing a management and leadership skills crisis, according to a business news portal implied by a recent poll of 2,500 UK-based SMEs carried out by Warwick Business School. Many of the small businesses surveyed admitted that poor management skills, particularly in the entrepreneurial arena, are restricting their growth.
The research also found that the adoption of key managerial practises e.g. formalised strategic management, is low among SMEs. Commenting, the report’s author, Warwick Business School’s Professor James Hayton, said: “There is currently a ‘long tail’ of SMEs not employing management best practice. Under-developed leadership and management skills and a widespread failure to adopt management best practices are constraining the performance and growth of a large number of SMEs.”
Understanding SMEs
The professor analysed several factors, in order to cultivate a better understanding of the state of the SME sector. This included exploring the link between entrepreneurship, leadership and management skills. He also examined the implementation of management best practises and how all of this relates to productivity, turnover and employment growth, which are key performance indicators.
The results which Hayton came to, clearly illustrate that leadership and management skills are under-developed in many SMEs, when compared to their larger counterparts. Expanding, he said: “Of all of the dimensions measured, the most important predictor of positive performance is entrepreneurship skills. There is a strong argument that entrepreneurship skills are positively associated with good strategic management practices, good HRM practice, and ultimately firm performance.”
Confronting the issue
How can you avoid facing a similar management skills shortage at your firm, so your leaders can promote company-wide growth? It is key that you put in place a strategic hiring plan, rigorously vetting potentials through several interview stages, to ensure you take on the best and brightest. You could also implement robust leadership training programmes, with a heavy focus on entrepreneurship, for your incoming and existing managers, to equip them with the skills they require to enable expansion.
It will fall to you, as your firm’s leader, to promote these management skill development strategies. It may be hard for you to find the time for this, as there are various administrative tasks that are also your responsibility. Turner Little can lend a helping hand. You can utilise various corporate services we provide, such as VAT registration and business administration. This could free up your time so you can focus on ensuring that your management has the skills required to make your business a success.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
