Part I – Growing the business when facing a storm
This is Part I in a series of four blogs detailing how Small and Medium Enterprises (SME’s) should be planning to meet the challenges of 2023. Rather than setting a course for ‘survival’ following a detailed plan will enable a growth mindset that will pay dividends throughout the challenges of 2023.
These are difficult times and they are going to require careful navigation in 2023. The single most impactive thing an SME owner can do when looking forward is to create a plan for this next 12 months that tests and challenges both themselves and their business. Planning can mitigate risks and create options to ease the pain points that will be experienced in the next year. SME business owners will need to look to their strengths and make the most of those so that the challenge can also become an opportunity.
Larger organisations are also finding these times as difficult. Only Apple Inc. have grown profits in line with expectations of the big tech giants in the last 12 months with such stalwart companies as Amazon and Microsoft experiencing huge turbulence in profits. As in life, confidence, certainty, planning and self-belief can go a very long way in an SME. Here in the UK in a recent Institute of Directors survey members reported that despite the challenges they remain optimistic about the future, with 60% expecting continued revenue growth this year. There is an understanding that profit margins are going to be affected and that increasing costs cannot all be passed on to the customer if the SME is to stay competitive. The approach to pricing and marketing is key this next year above all others.
The challenges for SME owners are never-ending. They will always have to find innovative ways within their 12 month plan to stay afloat, but also to gain a competitive edge by addressing the core problems that they are able to anticipate. In 2023, the challenges for business owners are even greater as the economy has only made an anaemic recovery from the pandemic and is experiencing increased costs created by the disruption of Russia’s invasion of Ukraine. These times require not just innovation and boldness but they also require transformative thinking.
The core elements for the SME plan in 2023 must be about growth, upscaling and about creating significant transformation by shaking off their ‘survival’ mode. There are some opportunities to create change in this adversity that will support business growth in the long-term.
Leading the business with emotional intelligence and empathy
There have been times when leading with compassion and emotional intelligence may have been considered as faddism or as an optional extra. To be competitive in 2023 emotional intelligence in business is absolutely essential. This will enable the business owner to perform at a higher level and similarly allow development for the people that work for the SME. Many are describing the ‘great resignation’ following the pandemic in which individuals are considering their careers and their futures. This is leading to difficulties for all organisations, including SME’s. It is vital that leaders understand that part of the reflection for their people is that they want to feel safe and more cared for and that this need for care in their work, if met by reciprocated compassion, empathy and bravery by business owners, not only will they keep the loyalty of their best people, it will also cement greater team spirit and encourage ever greater levels of discretionary effort to be given.
The use of emotional intelligence, the demonstration of compassion as a leader must start with the way that the leader of the SME looks after themselves. Even in an organisation working frequent long hours there are ways for the leader to manage their own wellbeing in a way that encourages others to do so. This breaks an increasing ‘presenteeism’ culture that can prevail when leaders feel threatened by the sort of challenges that are being faced now and will continue into 2023.
The following article published on LinkedIn by Professor Amanda Kirby contains a really useful 10 point plan for each business owner to practice what they preach and think about how to show self-compassion and to lead others with compassion.
Compassionate leadership could limit the ‘great resignation’ (linkedin.com) Prof. Amanda Kirby
This takes the qualities of emotional intelligence and empathy a stage further in that it is about what is provided for the employees of an SME. This is the fuel in the tank that will power the growth of the SME through 2023 and energise the ability to meet the challenges faced. It will certainly avoid one of the biggest challenges facing businesses, burnout of staff. There are practical benefits of successful wellness and wellbeing plans for employees but also having such an approach is saleable in the job market and can guarantee getting better quality recruits and retaining the best and most skilled staff when businesses are battling to keep their people.
Research from the Association of British Insurers (ABI) shows that offering health and wellbeing benefits to staff can play a valuable role in also boosting productivity. Three in five SME’s state that providing health and wellbeing benefits has significant impact on supporting the productivity of their company. This increases to 7 out of 10 in medium size businesses. Worryingly, only one in five are aware of their legal requirement to provide information on benefits to new employees by their first day of work. It may seem like a luxury for an SME in 2023 to engage with staff and consider what can be done to enhance wellness and wellbeing. Yet, in thinking about the clear and demonstrable link between such programmes and increased productivity, increased performance and reduced absenteeism they are a must. This equates to a reduction in overheads and an increase in profits to the business. The programmes need not necessarily involve huge investment and can be made up of healthy snacks, great hygiene, workplace access to mental health support and fitness plans from local gymnasiums as examples.
In Part II of this series look forward to pointers for how the SME can plan to counter the economic headwinds that are predicted in 2023…
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