4 things small businesses must do to overcome the UK’s lack of strong leaders

Leadership can make or break a business of any size. But for SMEs in particular, having great leaders in place to inspire others and to build a strong future is essential. However, in a new report released in March 2016, the Federation of Small Businesses identified a “worrying lack of leadership and management skills” as a key factor in the UK’s stuttering economic growth.

The report called on small businesses, policymakers and partners across the private sector to join together to combat the worrying lack of leadership and management skills. But this isn’t a problem that is going to be solved overnight, and there is much that small businesses can be doing to tackle this talent deficit.

Love Energy Savings, specialists in business energy comparison and saving SMEs money, highlights four things that small businesses can do to build strong leaders.

1. Promote from within

Although they are rarely intentionally put in place, organisational hierarchies can be damaging for retaining employees across all levels. Nowadays people aren’t looking for jobs, they are looking for careers that they can stay in to grow and develop. But if your employees don’t have a clear sense of where they are going in their career, then they are unlikely to stick around for the long term.

Looking for your next team of managers from within comes with great benefits.

You know them - Whether they have worked for you for a few months or a few years, you will know them a lot better than anyone you interview. You will know their strengths and weaknesses, their personality and the way that they work, all of which are incredibly important to a growing business.

- They know you - Finding the right fit for a job is easy, but finding the perfect fit for your company can be a lot harder. Hiring from within means that you have already found someone who fits with your business and its culture.

Boost morale - Hiring from within proves that you are dedicated to your own people. Rewarding their hard work and loyalty can provide a tremendous boost to their morale as well as decreasing staff turnover.

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Recruitment is an expensive and time-consuming endeavour. It’s one of the biggest challenges that small businesses face, so it makes sense to create a culture of staff progression; the kind of culture that makes the most of the talent that’s already within your ranks. Sometimes, an employee who you’ve started to take for granted can really flourish if given extra responsibilities.

Give them a chance to shine!

2. Provide management training

Great leaders are made, not born. While certain traits will come more naturally to some than others, communication, the ability to negotiate, persuasion, and influence, are all attributes that can be learnt over time. Because people don’t become managers overnight, it is essential that companies provide proper training and support.

Despite this, the Federation of Small Businesses found in its latest report that just 19% of companies questioned offered external management training to their employees, and a staggering one in four businesses had never undertaken any management training at all.

The impact that accomplished managers can have on the rest of your employees should not be underestimated. In fact, there is a well-known saying that people don’t leave bad companies, they leave bad managers. So surely the best way to overcome the lack of great leaders in business is to create them yourself?

Internal training and mentoring is something we will touch on later, but there are dozens of different external training programmes and courses that you can attend, it’s just a matter of doing your research and finding the best ones.

3. Diversify your leadership teams

According to a report in 2015 from the International Labour Organisation, women are still underrepresented in middle and senior management, and although there has been an increase over the last 20 years, there is still plenty of work to be done to narrow this gender gap. Although progress is being made in the country’s biggest companies; in 2015 FTSE 100 companies hit a voluntary target of 25% female board members, SMEs can certainly take it upon themselves to lead the way for diversity.

Encouraging diversity in businesses of all shapes and sizes is not only the right thing to do, it’s also the smart thing to do. Bringing more women onto your senior management teams also brings with it a diversification of ideas, minds and new ways of thinking that you may not have thought you could harness. While it would be counter-productive to view women any different than men, there is no denying that working with a bigger variety of people brings with it more ideas and the chance for new opportunities.

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Despite the obvious lack of diversity in the workplace, quotas and targets are not the way to go. While these may solve the short-term problem of recruiting more female managers, it becomes more about box-ticking instead of real progression. Quotas become no more than a sticking plaster designed to cover up the issues, and forces companies to strive for numbers rather than hiring the right person for the right job. Focus on hiring the right people for the right jobs, or promoting them from within, and your management team should diversify and improve along the way.

4. Establish mentoring in your business

Much in the same way as training, mentoring is a fantastic way to encourage your leaders and managers of tomorrow to step into the shoes you need them to. Having someone to look up to and to guide you throughout your career can be enormously beneficial; unfortunately not a lot of people actually have this, to the detriment of both them and the company they work for.

The best thing about an internal mentoring programme is that it doesn’t have to cost you anymore than you’re already spending. Instead, all you would need to do is to identify those already working in middle and senior management who you believe are doing a great job, and see if they match personality and talent-wise with a junior member of the team. This may require a little trial and error, or you might choose to survey your potential mentors and mentees to discover more about them. 

However you choose to go about it, once your pairings have been established, it is essential that the relationship isn’t allowed to stagnate. A good mentoring relationship is one that needs to focus on supporting the mentee in their career trajectory. Whilst training is an excellent way to give your next team of leaders the abilities that they need, having a mentor by their side allows them to see these skills in practice. Celebrate the great leaders that you already have, and they will be able to help you create great leaders for the future.

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The UK is a great place to start a business. The economic hubs of London, Manchester and Birmingham make great cities for up and coming SMEs to settle down, and all sectors have been known to thrive here. But the lack of leaders and managers is holding these businesses back from reaching the next level and what they can achieve.

When faced with a lack of leadership within your business, try not to view it as a problem. Instead see it as an opportunity to transform your hierarchy, focusing on hiring the very best people and providing quality training for your staff. Not only will you build a strong team from within, you’ll also build a loyal one that will drive your business forward.

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