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Importance Of SMEs Is Grossly Underestimated

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POST WRITTEN BY
Sabine Vinck
This article is more than 9 years old.

Small and medium-sized businesses account for 99% of private sector companies. But, out of the big business limelight, these businesses are all too often overlooked by policy makers and the complexity of the SME leader’s job is grossly underestimated.

Last week, as a member of the Young Presidents Organisation (YPO), I attended an event at 10 Downing Street with fellow YPO members and Daniel Korski, a policy advisor to the Prime Minister on Business, Tech and Enterprise to tackle the question of even more effective UK support for SMEs. With SMEs providing 60% of private sector jobs according to the Confederation of British industry, the question is not a trivial one.

The challenges faced by SME leaders are many. They need to attract and retain the right talent. And they need to adapt their talent strategy for different stages of business growth. They need to be able to scale up and expand globally, working around the many macro-economic challenges and fluctuations in FX markets.

But these leaders are the general managers par excellence: they deal with cash flow, products, clients, strategy, execution and operations on a daily basis. If the UK is serious about developing policies to support SMEs, these are the people to help us do it.

At every stage of the business, SME leaders essentially reinvent themselves and the business. It’s something I understand first hand. In my day job as MD for the Centre of Management Development at London Business School, I manage Executive Education. And nothing stands still. The organisation has doubled in size over the past four years and in that time I have had to become a different leader.

I went from knowing all our clients individually to hiring a Director of Client Relations and from monitoring individual cash transactions to simply receiving a month-end pack with our financial position. As leaders of small and medium-sized operations, I know we need to commit to self-awareness, self-management and self-improvement. We also need to acknowledge how ambitious the task at hand is.

I am in the business of designing learning interventions for senior leaders of large corporations, looking to reinvent themselves. So, until I arrived at Downing Street last week, I confess it never occurred to me to look at the Young Presidents Organisation members for inspiration. I wonder why? Could it be that in simply getting on with the job, the many sterling SME leaders up and down the country are simply going under our radar?

It’s time that these businesses, which are such an important engine for economic growth and poverty reduction in the UK, command our full attention and some creative thinking about the best way to boost them. I have my own view.

First, learning on the fly is hard and researching stuff is time-consuming. Could the Government be even more effective at demonstrating how the different policies and schemes fit together? Could it better sign-post the many initiatives that are in place to support the SME sector?

Could educational providers design more courses that are directly relevant to SME leaders, using case studies they can relate to and acknowledging the challenges they face more explicitly? At London Business School, we have found that doing so pays off.

Second, SME leaders need support: peers and mentors to guide them. I have gone from thinking that the YPO and other entrepreneur networks were important to believing that they are essential. How else will SME leaders finally get the support they need? Raising the profiles of these organisations should be a priority. I stumbled upon YPO thanks to a personal connection. It should have been an obvious choice.