The role of a leader is crucial in any organisation but especially so in small- and medium-sized enterprises.
For an SME, the decision to allocate one person to develop a new revenue stream is a significant commitment, while in a corporate it is hardly noticeable. Losing an employee or a client is likely to have a far more noticeable impact on revenues in an SME than in a large firm, while capital investments can have a worrying effect on cash flow.
Within a corporate, the governance frameworks to protect the organisation already exist; in an SME, you are constantly balancing risk and reward, and where you allocate your time as you focus on the business-critical issues. The quality of a leader will ultimately determine the organisation’s success.
The cliché that ‘leaders are born not made’ is nonsense. SME leaders have three roles, and you can improve at each one. The first is to take responsibility for the finances, without which you won’t have a business. The second is to make good decisions that enable your business to compete successfully in a crowded industry. And the third is to inspire your team, encouraging them to feel invested in you and the company so that they will work harder and stay around for longer.
The skills for each of these three roles can be developed. If you follow these five tips you will be on the right track.
Tips for successful leadership
1. Clarity of vision
You need a clear vision for the business, broken down into a three-year plan (see Recruiter July 2015, p43). For your team to help you achieve the vision, you must share it with them at least once a year. Growth mapping tools, available online, can make your vision clearer and easier for your team to engage with. Tempting as it may be, don’t oversell the future to your team; keep it high-level but with enough detail to convince the sceptics and show how they will benefit from this exciting future.
2.Ongoing communication & engagement with the team
People work for SMEs because of the opportunity to make a tangible difference. Recognising their contribution and the results will make your team feel more invested in the company and loyal to you. Sharing details of the company’s performance and recognising individual contributions verbally, with small gestures and financial rewards, will all help. The most successful leaders encourage all their employees to come up with ideas that will grow the business and then give them the opportunity to implement those ideas.
Employees look to their leaders to set an example. You must be controlled and disciplined in your own behaviour and attitude if you want your employees to be the same. Furthermore if you are inconsistent this will waste your resources, frustrating your employees and causing them to question your commitment to your most recent decisions. Consistency stems from your three-year vision and annual planning.
4. Sharing the burden
A business’s needs evolve as it grows. Leaders understand they cannot meet all those needs themselves, so empower those around them. Your business will grow faster if you recognise the strengths of individuals, delegate and give them the chance to grow. Devolving responsibility will reduce staff turnover, enabling you to grow with the business. To improve your delegation, try writing down EVERY task you get involved with for one week and identify any that could be done as well (or better) by a junior member of the team, thereby freeing you up to work on the things that will make a bigger difference to the business.
5. Ongoing development
You, your team and your business will go stale if you don’t invest in training and coaching so make sure once that you have attracted the right people to your business, that you retain them by offering some sort of personal or professional development!