Thursday, 28 January 2010

Entrepreneurial leading out of recession

The OUBS ran a Leadership Academy Workshop today on entrepreneurs and the recession.

The OU director of research and enterprise, Malcolm Cross, introduced the morning by pointing out that SMEs are restricted in time and money and critical resources, and that HEIs are large repositories of skills.

The first session on challenges and impact of recession on small firms was presented by Alistair Anderson who’d been tasked with the academic understanding of small businesses. SMEs are the leading edge of change, so seeing how they cope with the recession and its impact might suggest how SMEs are leading us out of the recession. An FSB survey of small businesses allowed self reported performance. The bad news was that 41% thought they were doing badly and of those 25% thought things were going to get worse.

  • The major finding was the flexibility of small firm owners
  • Another finding was the high level of staff loyalty.
  • The recession had a lower impact in Scotland and the north east than in the rest of the UK.
  • Reactions were to cut prices, take out 3rd parties, offer discounts, require bigger deposits from customers.
The future requires working smarter. Small firms will be the leading edge out of the recession because of their flexibility.

The second talk on Business Link came from John O’Reilly, from East Midlands Regional Development Agency. THE RDAs’ remit is wider than business support because it includes responding to economic shocks, and there is a portfolio of over 20 products that provide support, business transformation grants, business health checks and training.
In future, strategies are about building a new economy, creating the right conditions for growth and targeting key sectors, such as digital, low carbon, advanced manufacturing, whilst continuing to monitor success.

The third speaker, Steve Kempster, addressed issues of leadership in SMEs who started by posing the question:
“How do we learn to lead?”
And is leadership a person, a process or the output?

To answer it, he suggested that people practise in a particular context bringing in a combination of skills together with their influences on attitudes, values and assumptions, and that these attitudes themselves influence context skills and practice of repeated everyday activities. Consequently leadership has a salient meaning depending on the context. An entrepreneurial context disables how we learn leadership, which is through opportunities for observation, accesses to notable others, partnership. Such opportunities are available in the employed context, but to the self employed the concept of leadership is of tainted management, so is avoided as not salient.

Steve commented that owner-managers tend to identify with their profession or trade. So if leadership is important, then it could be measured it though a shift in identity and how much leadership becomes salient through networks. Networks enable, facilitating support and couch, not telling people what to do.

The question and answer session revealed the emphasis of the three speakers to be on
  1. Flexibility
  2. Available resources
  3. Salient networks.
What did I get from it? The talk on leadership was the most inspiring and the most valuable to me. Perhaps this is because he had a systems perspective on leadership, or perhaps it's because some of what he said about values, attitudes and integrity matched some of the attitudes I'd noted in interviewees when I asked them how they'd got their teams to engage. It's not something leaders think about as they do it, and one of my interviewees had recently had such success that his organisation was analysing how he'd done what he'd done and getting him to speak to others. He wasn't quite sure, but talked about values, behaviours, attitudes and honesty. That's what lead that organisation out of potential recessionary disaster.

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