A new report published by Standard Life has revealed some of the key drivers of success for UK small and medium-sized enterprises (SMEs) with research showing an evolution in working practices, company culture and innovation.
Polling both SME leaders and employees, the report highlights the trends of collaboration, empowerment and adaptability as central to growth over the next five years.
In order to achieve business success, SME leaders say the number one priority is to empower the workforce by building an environment that encourages creativity and innovation. Employees agree, stating that the most desirable quality in a business leader is the ability to empower and trust their colleagues.
Agile business is embedded in the psyche and practices of UK SMEs today, with 60 per cent of employees saying ‘adaptability’ is the most important attribute for professional success.
The findings also suggest the traditional five-year business planning cycle is largely a thing of the past, with a huge majority of SME leaders (82 per cent) altering their strategy at least once a year, and almost three fifths doing so at least every six months.
Stephen Ingledew, Standard Life's managing director of marketing says, 'SMEs are an important part of our client base, and we wanted to take a closer look at the behaviours these business leaders and their employees adopt to achieve success and fuel entrepreneurship.
'Our research shows that UK SMEs are strongly committed to building working environments that encourage and nurture flexibility and innovation.'
Business leaders believe that the most productive workforce can be achieved by offering employees flexible working conditions (41 per cent) and by investing in future potential (40 per cent), with training/upskilling given as the number one focus for talent development over the next five years.
Similarly, employees highlight the importance of people development in business success, with innovation in staff training (44 per cent) and empowering them to try new things (38 per cent) seen as the best ways to remain competitive.
Evidence suggests that leadership potential is widespread, but that work needs to be done to break down perceived barriers to the top. Whilst the majority (69 per cent) of leaders believing the role of CEO/MD will become more diverse and accessible to their workforce in the future, it is a position that is still seen as out of reach by many employees, with 56 per cent expecting promotion to CEO to become more challenging over the next five years.
Success is not only about results and financial benefit for SMEs today; both leaders and employees want to do business in the right way, focusing on broader job satisfaction and making a positive contribution to their wider communities or ‘ecosystem.’
Investment in the local area is uncovered as a way of supporting prosperity beyond the business, with nearly nine in ten (88 per cent) SMEs attracting and recruiting talent from their region, and 85 per cent enlisting the services of local suppliers and contractors.
Ingledew adds, 'SMEs are generally very outward-looking and focused on retaining strong core values which help them attract and retain the best talent.
'The research indicates that they regard positive contributions to society as an important measure of success, and that they carefully consider how their decisions impact their broader industry, their people and their communities.'
Further reading on collaboration
See also: Business plans key to business success