Given how dynamic the business landscape has gotten over the past few years, small to medium-sized business (SMBs) organizations are facing more unique challenges than ever before. Leadership, has always been a delicate topic in SMBs. Our team at MRS loves a phrase that we call – realisation point. This is where SMB’s are on the verge of breaking though into being a larger organization, but they realise their Senior Leadership Team (SLT) is not equipped to take the organization and its people to the next level. The main reason for this, is that members of the SLT are attached to the day-to-day operations. They are very much working with their team, and as such have neglected their responsibility to lead their team.
How are SMB’s and Corporations different?
Larger organizations operate on conventional leadership, where CEO’s and the Senior Executives are more focused on the bigger picture (i.e., vision, business strategy, etc). They don’t dive deeply into the day-to-day matters, but instead work on delegating responsibilities, and managing their people for success. A study by Michael Porter and Nitin Nohria, both professors at Harvard, found that this is how CEO’s spend their time:
- 25% on people and relationships
- 25% on business unit reviews
- 16% of organizations and culture
- 21% on strategy
- 1% on crisis management
- 4% on operations
SMB leaders, on the other hand, have a much smaller team. Each member is likely to wear multiple hats, work through limited resources, and this includes the SMB leaders themselves. They are very much part of the day-to-day operation. Consequently, the act of leadership has a higher probability of fading, and be replaced with a flatter structure, where everyone are simply colleagues. By no means is this a negative thing, SMB’s have some of the most collaborative teams and divisions. However, for an SMB to grow and transition to a larger organization, there needs to be leadership at the senior level.
In contrast to the breakdown above, a study by TAB found that this is how business owners (SMB’s) spend theirs:
- 68.1% on tackling day-to-day tasks
- 31.9% working on the business’ long-term goals, strategic planning, etc
SMB leaders recognize that they focus too much on the day-to-day and don’t spend enough time with their employees. A large percentage of SMB leaders recognize the need to:
- Hold employees accountable (68%)
- Delegate administrative tasks (56%)
- Stop working below pay grade (44%)
- Prevent employees from “upward delegating” (41%)
However, most SMB leaders can’t seem to shake off their attachment towards the day-to-day operations. They recognize the need, but there aren’t any initiatives for them to transition into leaders. Most SMBs don’t know where to start. Compared to large corporations, most would not have the financial budget to take on expensive leadership training programs, which wouldn’t be useful for them anyway.
Starting Small: Baby Steps
When it comes to developing leadership, most corporations jump straight into an intensive 2-week leadership program. They learn what leadership is, but not what leadership means, for their organization.
The first step to developing capable leaders in an SMB, is to identify and understand the leadership qualities that are required. Naturally, you’ll have your staple qualities:
- Effective communication
- Integrity and honesty
- Appropriate delegation
The next step is to take these generic qualities and dive deeper into what they translate to in your organization. What does effective communication look like? Is it speaking concisely and in a straightforward manner? Or is it more related to active listening and soliciting ideas? It could be both. As such, it is critical that you first develop a set of qualities comprising of various behaviours and characteristics that are essential in your organization.
To help you start, take a look at our Leadership Development 360 Template. It contains 80 behavioural qualities across 19 leadership competencies. With a substantial increase in SMBs using our Leadership Development 360, we are confident that this template will help you kickstart your leadership journey.
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