Article: Leadership in SMEs

#SMETalent

Leadership in SMEs

Leadership in SMEs is a tricky domain, for it requires one to play the boss and leader at the same time.
Leadership in SMEs

The role of a leader in a small or medium enterprise (SME) is inarguably different than that of a just-launched start-up, or a big and mature organisation. Start-ups require their leaders and managers to exist in a constant state of flux, and often executing all-hands-on-deck approach on a daily basis, with being exceptionally involved in the smallest day-to-day activity, in contrast to a large organisation, where the leader(s) often limit themselves to charting growth, expansion, long-term planning and setting company direction on macro-level. Leaders in SMEs can be placed somewhere between the two extremes, wherein, they need to manage things, both big and small. 

Consequently, the quality and capability of a leader at the top of SMEs ultimately decides the final result, much like in any other organisation; but in contrast to other organisations, since the stakes are higher than that of a start-up, failing isn’t really an option, and hiding behind positional authority, like in a big organisation, isn’t possible either. SMEs are constantly growing, struggling, and tackling retention and employee engagement challenges, but have an established sense of purpose, overarching values, and the ability to innovate, that can be leveraged by the leader effectively. However, key to understanding the role of a leader in SMEs is looking at it from different perspectives: 

Boss and Leader: SME leaders, while planning the bigger goals of the organisation, need to be effective bosses as well in order to accountability and establish consistency and stability. Donning both the hats can be akin to doing the balancing act on a tightrope, but what is important is that a balance is struck between the two roles, and both are used effectively used to reinforce work values. 

Thinking several steps ahead: In continuation of the above, playing a leader will mean drawing the map to several steps in the future, and ensuring that the organisations remains relevant, sustainable and agile in the long term. It also means being responsible for the finances of the company, and making planned and aware decisions as to how to raise (if needed) and allocate resources. 

Focussing on Employees: SME leaders have conducive settings to ensure that, their employees remain at the core of decision-making processes, and that they remain motivated, engaged and driven individuals. Individualised consideration, which aligns personal career goals with company goals, and providing challenging intellectual stimulation, by building mutual trust, being empathetic and appreciating hard work, will help SME leaders be good bosses as well. 

Self-growth: Finally, leadership in SME is also about having a fluid and flexible approach to work processes and policies in alignment of the growth of businesses and employees. A leader must know how, and when, to best assert, change or halt approaches, tools and processes that are intended to achieve results. Leaders in SME need to consciously ensure that their actions are pointed towards helping them, and the organisation, grow in skill, knowledge and experience. 

While it is easier to talk, or write, about balancing the role of a leader and a boss in an SME, in practice, tasks do not always fall into such neat compartments. However, a simple common approach can help one juggle both the roles effectively. The first step is to listen – listen to your employees, your customers, your peers, industry leaders, or any other stakeholder that could give you a new perspective. After observing and assimilating information in the last step, plan the future – build something from scratch that will achieve the intended result. Next, gather feedback and response, and improve on it – be flexible to change course, and fine tune your initial vision, in context of the new knowledge. And finally, learn from the entire process and set a loop to repeat it. No matter if you are planning employee engagement initiative to reduce turnover, or finalising your five-year-plan, the above approach is likely to simplify your task and help you achieve the desired goal better. 

To conclude, leadership in SMEs is a tricky domain, for it requires one to play the boss and leader at the same time. Formalised leadership in SMEs needs to be empathetic, as well as work towards the vision for tomorrow. However, even leaders in SMEs need a talented and trustworthy team that believes in the values of the organisation and is willing to defend them. How a company performs in the short and long term can rest on individual(s) in SMEs, and hence, it is critical that decisions are taken with care and understanding, especially when an organisation is growing, developing and establishing a firm foot. The job profile of leader in a SME might come bundled with a requirement to worry and work for a lot of thing: finances, resource allocation, talent, retention, engagement, etc, but once they have identified their leadership style, and are willing to adapt and evolve with the challenges of the job, ensuring consistence propelling of a business can be a heartily rewarding, thoroughly educative, and excitingly knowledgeable experience in itself.

Suggested Readings:

https://www.cipd.co.uk/Images/hands-on-or-hands-off_2014-effective-leadership_tcm18-8961.PDF 

 

Topics: #SMETalent, Leadership

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