This week I am the keynote speaker at the Ignite Conference at the Gympie Chamber on Leadership for SME’s, Start-Ups and Family Businesses. I have been reflecting on Leadership for SME’s a lot recently as well as speaking to many owners, founders and Directors of SME’s, Start-Ups and Family Businesses. There is a direct correlation between performance for these businesses and Leadership. Thing is when I am talking about Leadership, I mean self-leadership; knowing who you are as a person and leader and how your actions and behaviours drive culture and performance.
Why is it critical today? Strong leadership is important in a company of any size, but it is especially crucial when looking at SMEs and Start-Ups. With technology always improving, customer demands ever-changing and a fluctuating economy, leaders who can handle these obstacles and inspire their team to do the same are worth their weight in gold to any small or medium-sized business. Great leaders get their teams working to a high standard and give them the confidence to be able to overcome issues that arise, by fostering a suitable organisational culture that allows employees to feel valued and trusted. Recently Joanna Wyganowska conducted research on exploring how leadership and culture contribute to the sustainable success of high growth companies, reveals that these issues play a pivotal role and need to be better understood by high growth founders and company leaders. She found leadership was a deal breaker.
SMEs and Start-Ups need to be more adept at handling challenges than their larger counterparts, due to the fact they have fewer resources, so there’s less room for error. Most SMEs and Start-Ups turn their focus onto surviving in the business world; appointing leaders who may not be formally qualified or educated over those that are, because of the emphasis on learning on-the-job. This, in turn, affects leadership development and progression, as there are no clear requirements for leadership, and those who are not qualified are training the future leaders the same way they were taught, which is often detrimental to the success of an SME or Start-Up and perpetuates a cycle of poor leadership. If this cycle isn’t broken, an SME or Start-Up won’t ever reach its full potential – great leaders are needed to keep a company growing and advancing on the right track.
“One of the biggest changes a business goes through as it scales is the handing over of an idea from the founder to the people working in the organisation. The brand moves from being one person’s idea to being the professional focus of a whole group of people.”
Charlotte Keenan, head of the corporate engagement office EMEA at Goldman Sachs.
As Ms Keenan says, transitioning the day-to-day operations and running of the business from the founder/s to other team members and leaders is a big challenge to all SMEs and Start-Ups face as they grow. It’s important for a founder to have a team below them that aligns with their vision, values and beliefs, and shares the same passion for the organisation and its goals, as this is critical to success.
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Founders need to ensure they are choosing strong leaders to guide the employees and company in the right direction; the right leader will motivate your team to work their hardest and achieve great results and keep the organisation culture running smoothly. If your employees are working under a leader who cannot delegate, is hard to communicate with, doesn’t take responsibility for their mistakes or passes the blame, they will have low levels of job satisfaction and will be directly impacting the success of an SME or Start-Up through lack of performance. Leaders who micromanage will also have team morale at unacceptable levels, and again it’s the SME or Start-Up that will suffer. When a founder can trust that their leaders are performing at their best, and getting the same from their team, they are free to focus on other areas to help the business grow. Here is an interesting perspective from HBR too on Leadership and Start-Ups.
“As the team grows, founders often react by micromanaging the details of their business. In trying to take on everyone else’s job, the founder leaves the most critical position vacant. Learning to trust and empower others in the organisation leaves room for them to continue innovating, which is critical for business growth.”
Leadership development is something many SMEs or Start-Ups don’t provide for their staff; they don’t place the importance on leadership that they should and think that less than qualified leaders teaching the next leaders is an acceptable practice. Resources may be sparse, and leadership development may seem like an unnecessary expense, but the lack of strong leadership will cost an SME or Start-Up a lot more. It’s something that must be made a focus for all if they wish to not just survive but thrive.
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LeadershipHQ have launched a free Business and Organisational Leadership Health Quiz and Leadership Performance Coaching for your SME, Family Business or Start-Up. If you would like to know more please contact the team today at email@example.com