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Business size doesn’t matter - leadership and people management skills can benefit organisations of all sizes

Greater Birmingham Chambers of Commerce

This blog post is part of the Greater Birmingham Chambers of Commerce’s 2019 Growth Through People campaign. Growth Through People is the annual Greater Birmingham Chambers of Commerce campaign aiming to help local firms boost productivity through improved leadership and people management skills. Delivered by the GBCC with a range of partners, it includes free training sessions, workshops and events alongside research and thought leadership content. This year, the campaign ran from 25th February – 22nd March 2019. 500 delegates attended 16 free events. Click here to find out more and don’t forget to join the conversation on social media with #GTP19.

In Short:

Placing a high level of importance on Leadership and people management skills can benefit organisations of all sizes. People are typically the biggest expenditure – and asset – of a business, and effective leadership and people management skills are essential to make the most of your people.

In Full:

Small and mid-sized businesses are most often perceived as placing low importance on leadership and people management skills

Leadership and people management skills are important for employers of all sizes. People are typically the biggest expenditure – and asset – of a business, and effective leadership and people management skills are essential to make the most of your people.

Surveying of 2019 Growth Through People delegates indicated that staff of small and mid-sized organisations are half as likely to believe that their organisation places high importance on investment in leadership and people management skills than those of large organisations.

Staff of small and mid-sized organisations are also more than double as likely to believe their organisations place low importance on investment in leadership skills than staff of large organisations.

Perceived importance placed on leadership skills

Business Size (by number of employees)

Importance placed by organisations on leadership skills, as perceived by employees (% of respondents from businesses of this size)

Low

Medium

High

Small and Mid-sized

29%

47%

24%

Large

13%

31%

56%

 

Business Size (by number of employees)

Importance placed by organisations on people management skills, as perceived by employees (% of respondents from businesses of this size)

Low

Medium

High

Small and Mid-sized

18%

53%

29%

Large

19%

19%

63%

33% of respondents to surveying identified their organisations as either small (with 10-49 employees) or mid-sized (50-259 employees). 35% were from large organisations (with 250+ employees).

However, these skills are important for businesses of all sizes

Poor leadership and people management have a direct impact on organisational performance. CMI report (here) that poor management is estimated ‘to cost the UK £84bn in lost productivity a year…effective MLD (management and leadership development) can have an overall impact on organisational performance of 23 per cent.’

Growth Through People delegates themselves understand this: 98% of those surveyed during the 2019 campaign believe that improving leadership & people management skills has a positive impact on an organisation’s productivity.

Improving leadership and people management is in fact particularly important within SME’s.

The UK Government Department for Business, Energy & Industrial Strategy Business Productivity Review call for evidence (here) cites Bryson and Forth analysis (here) that ‘SMEs are less likely to use formal management practices than larger firms. However, even smaller businesses with fewer employees can benefit from having structured management and leadership practices’: Bryson and Forth further reference that “The studies of Bloom et al (2016a, 2017) and Broszeit (2016) each show positive and statistically significant associations between the greater use of formal management practices and productivity. We find the same in our sample of SMEs [a sample taken from across the British economy]. A one standard deviation increase in our index of management practices is associated with a 5% increase in the growth rate of firm productivity.”

Even those organisations who think they don’t need to boost productivity might want to look again. Be the Business (here) highlight that many firms overestimate their productivity. “Four in five (79%) business owners or managers believed their business was as productive or more productive than their peers.“

Small and mid-sized organisations mustn’t dismiss opportunities to improve leadership and people management skills on the basis of their size – if anything, based on the research above, they might want to seek them out.

Emily Stubbs
Policy and Patron Advisor
Greater Birmingham Chambers of Commerce