Now it’s official! Results from a major UK research project show “poor leadership and management skills and a widespread failure to adopt management best practices are constraining the performance and growth of a large number of SMEs.”
The research also shows that SME performance was closely related to levels of leadership, management and entrepreneurial skills as well as the tendency to adopt management best practices. In the study these factors were consistently positively related to both turnover and productivity
There is no reason why SMEs cannot adopt the best management practices such as strategic planning, implementation of proper systems and controls to increase business performance and tackle inefficiencies. This UK survey (from Warwick Business School ) covering 2500 SMEs highlights the strong correlation between good management practices and increased growth in turnover and employment. Ensuring these convert into profit and cash flow growth is the critical remaining challenge and one where many businesses without key management skills fail. Of course it’s not just a matter of throwing money and resources into a business. It’s a matter of identifying the critical issues and tackling these.
Are Irish SMEs any different to UK SMEs and are the same tendencies not applicable here also? Unfortunately the results of companies filing accounts in the CRO suggest the same problems apply even stronger here but there’s no reason why we cannot change this. Usually it just means a business owner deciding ‘there might just be a better/different way of doing some things’ and seeking some remedies