SME Adviser Series: Creating future leaders

In most businesses, there are high performers who progress through the ranks of the organisation and eventually start leading business teams. However, it cannot be assumed that just, because you have a star performer, they will be great at leading and managing people.

Whilst key leadership behaviours include performance management and people management, a survey earlier in the year showed that 53 per cent of SMEs said their leaders’ performance management skills were lacking, with 44 per cent feeling that their leaders demonstrated ineffective people management.

For many SMEs, creating future leaders may not seem like a task for now. However, in order for a business to have an adequate pipeline of strong leaders which is key to the future success of their business, a variety of skills which promote both strong people management and technical excellence need to be taught, and this takes time.

Before a business can focus on high leadership performance, it must define its company mission. For too many businesses their vision and mission are more ‘marketing’ pieces created for placement on their website or in a company brochure. Rarely are these statements of a nature that can drive the business, its people and its decision-making forward. However, vision and mission are two important elements for an SME business in providing strategic direction, especially in a fast-changing external environment characterised by political and economic instability, fast paced technological developments, and increased competition. Vision indicates the ideal direction or guiding philosophy and future position of the business, while the mission is a vehicle to define the boundaries of the business’ ambitions (product, market, geographic reach).

In order for SMEs to create strong leaders, they must be able to articulate clearly their ambitions and vision towards achieving success. This vision should permeate the business across all areas of the workplace, in actions, beliefs, values and goals.

In an interview with Harvard Business Review*, when asked what makes a good business leader John Welch, who served as Chairman and CEO of General Electric (GE) from 1981 – 2001, said:

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion. Above all else, though, good leaders are open. They go up, down, and around their organisation to reach people. They don’t stick to the established channels. They’re informal. They’re straight with people. They make a religion out of being accessible. They never get bored telling their story.” During Mr Welch’s tenure at GE, the company’s value rose 4,000 per cent.

Never underestimate the importance of investing time in creating effective future leaders for your SME business. Leadership is more than just a competitive advantage. It separates high performing companies from the rest.

Every SME business owner needs to recognise that success depends on the key strengths of its employees, so it is essential that those appointed to leadership roles have what it takes. A great leader works with star performers to ensure they develop the skills to transition to being more of a ‘head coach’ rather than just a manager, providing the guidance and mentoring required to achieve high performance.

But, the strongest businesses are not built overnight. It takes time to identify and develop tomorrow’s leaders, and SME owners that put in the work now will realise more benefits than just having a succession plan.

For further information about how we can help you and your SME business achieve your goals and ambitions, contact your usual Beavis Morgan Partner or email

Source: Speed, Simplicity, Self-Confidence: An Interview with Jack Welch ~ Harvard Business Review