What small businesses have that large ones lack

Learnings at Annual Conference

With the cost of doing business so high, we need to be honest about what we’re facing. Smaller, less-developed organisations can no longer afford to be served half-measures.

As Sir Keir Starmer highlighted in his keynote address, “More small businesses are going under now than at any time since records began…. Every single one a personal tragedy: an ambition, a dream, an investment in a better future – gone.”

Whilst this sounded like the mere pointing out of a problem, over the course of the Conference it became apparent that it actually pointed out the better part of the solution: prioritise small businesses to help boost innovation, thus fuelling growth.

At the Conference, both the Prime Minister and the Leader of the Opposition agreed to prioritise research and innovation, and the CBI’s President announced a boosting of the CBI’s engagement with start-ups and scale-ups in the new year. We look forward to all of this.

Newer, smaller enterprises are often the masters of applied R&D, innovation, lean and agile work processes, tech adoption at pace, market disruption, brand identity, and so much more – they are a requisite for a progressive UK economy.

Size does matter

Whether you’re the founder of your business or have a customer-facing function within it, you are likely wearing somewhere between five and fifteen different hats during the course of your working day. You don’t share the seemingly luxurious challenges your FTSE counterparts do.

To make matters harder, you need to be keeping an eye on growth opportunities at all times to…well, grow.

But does growth always have to mean geographic expansion; scaling up; trading internationally; or multiplying every resource, service, or tool to your name? At the Conference, those speaking on stage from businesses that could be classed as SMEs were in the minority, but what is for certain is that both this small group and recent SMEs with a prominent start-up heritage had things in common on which they outshone the rest of the room:

• A purpose truly rooted in environmental or social demand and impact, and a true sense of the ramifications of their business on everyday people and places.
• They come prepared to defend their existence beyond financial value: Closely linked to the point above, the more we look around, the more we recognise it’s not enough anymore to just be profitable as a business – you need to pretty much justify your profit-making now. Offering a solution to a societal and/or market demand is one solid way of addressing that.
• A fierce respect and trust for their employees and the expertise they bring in, which has been earnt because it’s often the result of a rigorous yet inclusive talent recruitment strategy – watch CEO and Founder of Multiverse Euan Blair (and others) share backstage at the Conference just how imperative people are to business.
• The ability to focus on what’s in their control and not be too swayed, one way or the other, by external developments that often threaten to spell doom.
• Understanding the working benefits that their "smallness’ offers and how to leverage them. Group Head of People and Culture at Hays, Sandra Henke, told audience: “Not everyone wants to work for a large, global organisation. We all have our individual career equation”. Some want an environment to which they can take bold, diversified ideas and run with them; others want maximum flexibility for greater work-life balance; others still prefer to work as a ‘big cog in a small engine’. SMEs can bring this into the non-monetary benefits of their employee value proposition and recruitment strategy.
• Leveraging speed as a superpower of small businesses, which goes hand in hand with hardened experience in taking and managing risks in innovation, and in identifying situations and projects that call on progress over perfection.
• The ability to magnificently articulate their proposition with every conviction – the one that gets their people out of bed each morning.
• Keeping it grassroots: a resolute focus on the purpose which led them to found their business in the first place, aligned to all aspects of the organisation. This, coupled with an aversion to unnecessary bureaucracy or to serving stakeholders that are unaligned with the core purpose.

Collaborating gainfully and building resilience

The idea of innovation partnerships and collaboration between large and small organisations is nothing new. It will never be just a trend because there is no end to the possibilities a partnership can sow. But as we look around, these collaborative models and ecosystems are not as common or typical as they could be.

For the sake of the long term and building resilience, large organisations have much to learn from smaller ones, and vice versa. Though far from an overnight transition, here are some steps you can take right now to ease yourself in:

1. Let the Big Fish Little Fish campaign guide you on partnering large and small for growth and development.
2. There's also the toolkit on making your business resilient, much of it achieved by alliances and collaboration across supply chains.
3. At the Conference, Amanda Pritchard, CEO of NHS England, encouraged businesses  to “get stuck in to working with the local NHS because there’s lots of space for innovation. A lot of opportunities both nationally and locally with the NHS”. With greater digitisation and integrated systems in place, health partnerships should be easier to navigate. As a starter, the Work Health Index may help you to identify what you can work on to start shaping your health offering for your people.
4. Finally, try Winning with fintech for size, a partnerships campaign launched with SMEs in mind, pointing them to fintech solutions bettered suited to their scope and the stage they’re at in their journey towards growth. The second toolkit in the campaign will be around international trade and access to finance, launching in January with a networking and panel event in London. Read more about it and register your space for it here – we heartily encourage small business to join us. (See the highlights of the launch of our debut toolkit for an idea of the sort of insights you'll gain.)