It’s the ambition of most SMEs to grow …. but according to a recent report from Goldman Sachs, only a small minority (one per cent) are likely to demonstrate the high growth that will create new jobs and drive economic growth.
There’s hard evidence to back up this claim. Figures show that this small number of high growth businesses actually created one million new jobs (around 23 per cent of the total) between 2007 and 2010.
There are, of course, a whole range of factors which can help to escalate growth and propel an SME from being one of the many (who are of course essential to keep the economy ticking over) to one of the few.
The latest Global Entrepreneurship Monitor (a regular barometer on the state of entrepreneurship across the world) says that success factors include positive attitudes towards entrepreneurial businesses in an economy, the availability of advice and support services and previous experience. Serial entrepreneurs, for example, are more likely to lead high growth businesses – and the culture in the US is generally more supportive than elsewhere..
So what can you do to ensure your business grows apace and becomes one of the elusive one per cent?
Recent research from the CIPD may provide a useful framework. In it’s report ‘Entrepreneurial Spirit: Driving Growth’, it looked at the behaviours that helped entrepreneurial organisations to flourish and identified ten key practices that are likely to keep companies at the leading edge.
Profit with purpose
The research found that the most successful entrepreneurial leaders had a genuine desire to make a sustainable difference to their local communities and beyond. The dissatisfaction they felt with some of the ‘uncaring’ practices employed by large corporates often spurred them on to try new things and lead in different ways. They worked hard to instill these values within their business and to create a shared emphasis on doing business in a responsible way.
Extending your reach
“When you don’t have a budget you are forced to be creative,” said Hillary Graves of Little Dish, one of the SME leaders interviewed for the research. Using strategies to amplify their impact and reach was one of the key behaviours demonstrated by entrepreneurial businesses. They were able to punch far above their weight by making clever use of social media, building alliances with other and employing ‘smart’ networking practices.
Hold on to intimacy
The best entrepreneurial organisations deliberately maintain a strong sense of intimacy with both employees and customers. They understand that it is this culture of intimacy and togetherness that sets them apart from many of their competitors and do all they can to enhance this as they develop and grow by disregarding hierarchy and providing all employees with opportunities for real business involvement and decision-making. Enabling bottom up innovation is also key. This is something that is within reach of even the smallest SME thanks to the latest generation of social tools, such as the social portal which is an integral part of Cezanne’s HR solution.
Maintaining the integrity of the brand
Entrepreneurial SMEs never compromise on the integrity of their brand. They work hard to create a shared sense of purpose and values both internally and externally. They chose partners, collaborators and charity recipients carefully to make sure they reflect those business values and are aligned with the brand. Entrepreneurial leaders are also good ‘connectors’ – introducing like-minded contacts to one other in a way which reflects positively on their own business.
Agility through expertise
Entrepreneurial organisations understand the importance of keeping on their toes and being agile. They know they cannot afford to rest on their laurels and as their business develops, they need to ensure that scanning the horizon for emerging trends, competitors and new opportunities becomes first nature. They find clever ways to seek out and use both their employees’ and their customers’ expertise in order to ensure they keep ahead of the game.
Working closely with customers
Working ‘deeply and deliberately’ with customers is another great way to maintain entrepreneurial edge. This involvement goes way beyond simple one-sided communication and is more about actively involving customers in shaping business strategy. The best businesses do this in a variety of ways – events, competitions, product testing, focus groups and feedback can all help to facilitate excitement about products and loyalty to the brand. It’s about listening to customers and drawing on their ideas and requirements to keep the business and brand fresh.
Treat employees as individuals
In entrepreneurial organisations employees are treated as individuals rather than one big group. There is a clear awareness of where individual strengths lie and people are encouraged to play to their strengths as much as possible. Entrepreneurs have a massive appetite for developing themselves and their employees. They are also aware of the potential for generating new and innovative approaches by connecting similarly minded and skilled people from inside and outside the business.
Maintain a sense of fun
‘Work hard play hard’ cultures can do much to stimulate innovation and entrepreneurial approaches. Leaders expect a lot from their people and create a strong work ethic within the business – but at the same time they recognise that fun is vital to their success. While many businesses talk about creating fun working cultures, very few actually achieve it. Those who are successful employ a variety of approaches. Some put the fun into their office design, others are creative around working practices, while some emphasise the social side of things.
Allow headspace for innovation
A common theme across all the organisations involved in the research was the emphasis they placed on employee innovation. Even when at their busiest, they deliberately protected time and space for employees to innovate because they recognised this was central to their success. In an SME this might mean encouraging people to generate new ideas by working across teams or actively encouraging those who work on the front line to come up with creative approaches to meeting customer needs.
Go forward with failure
The research found that fear of failure does not stop entrepreneurial businesses from doing things differently and innovating. They recognise that in order to create and innovate some failure is inevitable and realise the great potential in learning from mistakes and failures and even publicising these as part of the learning process.
The Goldman Sachs 10,000 small business programme provides practical support specifically for high growth businesses and together with university partners, runs intensive courses for small groups of entrepreneurs. https://www.goldmansachs.com/citizenship/10000-small-businesses/UK/news-and-events/10ksb-uk-progress-report-PDF.pdf
So how are you helping your business to grow? Let us know how you are forging ahead with expansion or kick-starting a new phase of growth?
Information courtesy of Entrepreneurial Spirit: Driving Growth, CIPD, www.cipd.co.uk