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Sustainable Business Research Institute

Increasing small business innovation and productivity through action-orientated methods

SME leadership development to support Yorkshire’s regional economy and help small businesses to grow and thrive.

Increasing small business innovation and productivity through action-orientated methods

The Challenge

For more than 25 years, both Devins and Gold have been conducting innovative applied and academic research associated with the development of leadership and management in small businesses. Much of this research is underpinned by an aspiration to raise the profile of smaller enterprises, to give them a voice in public policy and, most especially, to influence the design and development of interventions seeking to support SME development and growth.

Realising the ongoing challenge of engaging underperforming SMEs in research-informed, publicly funded business support initiatives that reflect the diverse interests of SMEs, Gold and Devins moved attention away from generalised one-size-fits-all toolkits towards a social constructionist view of supporting SME managers and their organisations. Recognition shifted towards understanding the uniqueness of SMEs and the crucial role of talk and conversation that engages with the interests of SME leaders (R1). Expanding on this, Gold and Devins showed how coaching can create a conversational space to consider problems and desires as a source of learning by leaders. Coaching provides a means of working with the values and interests of SMEs (R2).

The Approach

In a study commissioned by the Small Business Service, the unique nature of the micro business learning environment and the challenges this presents for policy were highlighted. Initiating and sustaining communicative relationships between micro business leaders and the intervention agencies was found to be a critical success factor in the design and delivery of relevant services. This led to the development of the conceptual model of management learning in micro businesses which still underpins the constructs and approach applied by the researchers today, namely that the foundation of successful intervention should be the interests of the managers themselves (R3).

Building on this, later research showed how the informal aspects of learning in SMEs can be stimulated by action learning (AL). AL also allows critical reflection to be embraced and a commitment to act. The importance of finding a common ground in order to develop effective networks was also emphasised (R4). The research investigated engagement with SMEs, highlighting how argument and persuasion are crucial skills that allow interaction which attunes to the needs and interests of SME leaders.

In further development of their ideas, Devins and Jones (R5) explored the challenges of developing strategy in small family businesses. They presented a framework to explore wicked problems, connections with organisational innovation and the need to re-frame strategising as a social endeavour to achieve more sustainable family business futures. Communication was again highlighted as being critical.

This innovative and proven approach to SME engagement has been tested and refined many times over the past years. However, at the heart of it remains the same conceptual model and social constructionist principle that the development of relationships between SME managers and those who wish to intervene in the business is a crucial element of the support process and any that do need to find a common area of understanding and approach as a ‘helper’ rather than an ‘expert’.

Using this method, the research team has successfully applied the model to a range of regional development programmes, networks and knowledge exchange activities that have helped small businesses to grow and thrive. Further, this body of work has extended practice in the field and contributed to the theoretical knowledge base within business and management.

The Impact

Our principles of good practice for SME leadership development, including the need to understand and build from context so that development can take into account the lived experience of managers, have been a critical design factor in all our activities. This is most evident from two substantial EU-funded regional development programmes that the research team supported.

As lead partner for business support, incubation and acceleration for the consortia, our conceptual model and approach informed the design of the Leeds Beckett University element. Programme participants contribute to the knowledge production process through a conversational diagnostic to benchmark activity and performance, and this intelligence is used to inform the development and delivery of services for smaller enterprises. Applied ‘masterclasses’ informed by the interests of local small businesses blend academic knowledge with practical intelligence to ensure that the learning is relevant and actionable in the SME context, plus the one-to-one mentoring ensure these mechanisms transfer and embed learning in the SME workplace. To this end, both projects achieved significant results, specifically:

  1. Business Growth Calderdale (2013-2015) enhanced the competitiveness, diversity and resilience of the Calderdale economy. The Leeds Beckett University contribution to the £3m project, part-funded by the European Regional Development Fund, supported 207 businesses, created 49 jobs and safeguarded 70 more. Furthermore, gross value added across the business that engaged, increased by £1,242,415. These changes resulted in increased business activity in Calderdale, thereby contributing to the local economy, and helping to improve the problem of low business numbers in the area.

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  2. The AD:VENTURE programme (2016-2022) provides business support to new and growing businesses in sectors of strategic importance and is aligned with both the city-region economic development plan and the national Government’s Industrial Strategy. To December 2018, AD:VENTURE had supported 1,770 entrepreneurs with more than half of these enterprises increasing the number of people they employ. It increased the number of start-up firms in the Leeds City Region, supported 11 businesses to bring new products or services to market and progressed at least five businesses from pre-start to start-up stages.

    This has made a significant contribution to the local economy, as outlined by Chair of the Leeds City Region Enterprise Partnership (LEP) and NP11, Roger Marsh OBE: “The success of the AD:VENTURE programme really does tell its own story. The business community throughout the Leeds City Region is vibrant, diverse and growing. Having ongoing access to the support, advice and guidance from experts, as well as funding provision, can only enhance this further. Knowing that start-ups and young organisations are attending workshops and accessing the bespoke help that they need is reassuring. It shows that we have in place the provision we need to nurture entrepreneurship across our region and to become an example of best practice for others”.

    AD:Venture website
  3. Drawing on the original model, Devins, Gold and Jones contributed to the development of Leeds Beckett Accelerate, an incubator introduced in 2019 to support early stage entrepreneurs. The COVID-19 pandemic instigated further programme innovations with new content, masterclasses, coaching and networking events moving online.

    Accelerate website
  4. More recently (2016-current), the application of these concepts was also applied to the Independent Food and Drink Academy (IFDA). Established by Leeds Beckett University, this unique service provides SMEs with facilitated events and training to support their growth and sustainability. The business leaders are at the heart of the network, deciding the content and delivery of the activities with opportunities to collaborate and learn from each other and other organisations. This effective research into practice exemplar demonstrates facilitation of a peer-to-peer learning group of 50 small businesses that has impacted individual firms, the sector (food and drink) and promoted the attractiveness of the locality (Leeds) as a destination.

    IFDA Website
  5. We have introduced Futures and Foresight learning during the pandemic to enable SME managers to consider possibilities for at least 5 years ahead as well as to prepare for difficulties.

    Futures Research Group pages
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UNIVERSITY BUSINESS CENTRES (UBCS)

Delivery of the knowledge exchange services through our six University Business Centres (UBCs) is also influenced by our research. Recently established by our university to encourage the start-up and development of smaller businesses in the regional economy, the UBCs provide dedicated space and support for more than 250 start-up and growth-oriented entrepreneurs. Each UBC has developed its own specialism working with local stakeholders and our lessons on engagement and preferred activities have become embedded to provide a successful programme of events targeted at the business community, regional policymakers and growth-oriented SMEs. The impact of the centres is particularly evident following a smart engagement approach to widen access so, as well as developing UBCs in Leeds, we have worked with a variety of public and private sector partners to introduce UBCs into higher education ‘cold spots’ in both Halifax and Wakefield where this type of support had not existed before.

ENGAGING LEADERS IN PEER-TO-PEER LEARNING

Our research points to the value of networks as a way of engaging leaders in peer-to-peer learning that focuses on relevant business issues. Such networks, including the Business Alliance (facilitated) by Leeds Business School have been operating for more than 10 years. This successful programme uses action learning to support small business leaders to thrive, as one states: “I have always found the action learning workshops helpful, from a business and personal point of view, having an executive board of people looking at issues from a different angle helps to clarify the thought process. Without measuring this, I’m sure it has had a positive effect on the bottom line of the company”.

INNOVATE UK KNOWLEDGE TRANSFER PARTNERSHIPS

Our targeted knowledge exchange programme has helped secure three Innovate UK Knowledge Transfer Partnerships (2016-current) working with SMEs to provide services to make a material difference to their strategic orientation and use of technology with projected increased profits of over £5m. Further, in 2017, to enhance our knowledge exchange activities, Devins established an Entrepreneur in Residence (EIR) programme at Leeds Business School to provide opportunities for small business leaders to share knowledge and experiences with students, academic staff and entrepreneurs looking to start or grow a business within the Leeds Beckett University environment. It provides an opportunity to inspire the next generation of entrepreneurs and to mentor small business leaders that seek to grow businesses in the Leeds City Region and beyond. Three EIRs joined the network when it was launched in 2017 and this network has grown to eight who have contributed to guest lectures and mentoring to students and small businesses facilitating the exchange, flow and co-creation of knowledge.

MENTORCERT ERASMUS+ PROJECT

As stated earlier, for more than 25 years academics at Leeds Business School have promoted the role that mentoring plays in supporting and empowering small business development, incorporating mentoring into our mainstream curriculum for undergraduate and postgraduate students, and delivering professional development and support programmes for business leaders. Recently we were able to extend this model to partner institutions in Europe through our participation in the peer-reviewed MentorCert (2017-2020) Erasmus+ project. Our learning across the partnership has informed the development of a skills matrix, assessed by an expert committee drawn from 12 countries. This provides a foundation for a new ISO equivalent business mentor certification scheme. As the project draws to a close, partners are making various arrangements to incorporate the learning in the curriculum and to develop bespoke courses to support the development of business mentors in their localities. As such, this project has international impact in countries such as Hungary, Poland, France, Portugal and Belgium.

In recognition of the innovative and extensive support Leeds Business School provides to SMEs, we were recently re-awarded the maximum Small Business Charter Award. Building on this, one of the areas we are currently developing relates to our ‘Vision – Insight – Practice’ framework to underpin the development of this business mentoring project. This ‘VIP’ model provides a unique mix of ‘hard’ strategy skills and ‘soft’ relational skills development that is essential for any business mentor seeking to support sustainable business development. This will, hopefully sustain a further generation of researchers in supporting small businesses development and promoting SME’s importance for economic sustainability, not only through their capacity to create jobs but also due to their resilience, innovation and agility.

  • Gold, J. and Devins, D. (2002) Social Constructionism: a theoretical framework to underpin support for the development of managers in SMEs? Journal of Small Business and Enterprise Development, Vol.9, No.2, pp.111-119. https://doi.org/10.1108/14626000210427366
  • Gold, J. and Devins, D. (2004), The Value of HRD in Small Firms: The Role of External Coaching. In J.Stewart and G. Beaver (Eds), HRD in Small Businesses, Routledge, London
  • Devins, D., Gold, J, Johnson, S. Holden, R. (2005) A conceptual model of management learning in micro businesses: Implications for research and policy. Education and Training, Vol 47, No 8/9. Pp 540-551. https://doi.org/10.1108/00400910510633099
  • Clarke, J.,Thorpe, R.,Anderson,L. and Gold, J. (2006), It's all action, it's all learning: action learning in SMEs, Journal of European Industrial Training; Volume: 30 Issue: 6; p.441 – 455. https://doi.org/10.1108/03090590610688825
  • Jones, O. and Gold, J and Devins, D (2020) SME productivity stakeholders: Getting in the right orbit. International Journal of Productivity and Performance Management. ISSN 0043-8022 DOI: https://doi.org/10.1108/IJPPM-06-2019-0274
  • Gold, J. & Thorpe, R (2008) ‘Training, it's a load of crap!’: the story of the hairdresser and his ‘Suit’, Human Resource Development International, Vol.11, No:4, pp.385-399, DOI:10.1080/13678860802261579
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