SMEs have to find ways to survive and prosper – in spite of difficulties within the economy – but it is very far from easy. There is greater and greater focus on the importance of management skills, and the longer the UK struggles to head out of recession in the current global economic climate, the more important these skills become. The importance of good management skills floats to the surface all the time as a key tool for survival and ultimate success in business. We constantly hear that we lack productivity in this country. Again, research demonstrates that good management = good productivity.
Some people are born with the talent to be a good leader and manager, but -as with, say, a talented cook – there are still basic rules to absorb which apply to everyone who wants to manage a business successfully and keep the staff on board at the same time. There are several models which can be followed, but in the end they all boil down to pretty much the same core requirements:
- Providing effective leadership
- Strategy and Planning
- People Management
- Financial Planning
- Risk Management
- Innovation and Creativity
(National Occupational Standards for Leadership and Management)
However, although it is difficult to know what effective management actually looks like, it is a fallacy to suppose that because training costs money (rather than immediately bringing in money) it should be one of the first sacrifices to be made when times are tough. A modest investment in good management training can significantly increase your efficiency, productivity and ultimate profitability, and is in fact a wise investment.
Time and again research arrives at the same conclusion: poor management practice leads to a high risk of eventual failure – as high as 56% of corporate businesses in the UK. Conversely, best practice management can result in a 23% increase in organisational performance (take a look at this research paper for a more detailed analysis http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/l/12-923-leadership-management-key-to-sustainable-growth-evidence.) Although overall business management appears to be improving in the UK, the same is true for our competitors, so it is unwise to be complacent.
- A perception that you can pick up leadership and management skills as you go along
- You are self-aware so far as your management skills are concerned and consider yourself to be competent
- It is an unnecessary expense to invest in management training
- You should dream up a mission statement and then tell your staff what it is, rather than involve them in its development
- Invest in leadership and management skills training for yourself and your staff
- Regularly review and update the training. This will enable your business better to withstand economic shocks and take advantage of new opportunities.
- Engaged employees are absent less often through sickness; they understand customer needs; they tend to be loyal and ultimately give the business a competitive edge
Nearly 40% of businesses could have been saved if professional advice had been sought earlier (poll carried out by insolvency experts mentioned in the research document referred to above).
Improving leadership and management capabilities makes sound business sense.