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This is an abridged version of the full report.

Promoting Sustainable Performance

A research and engagement initiative created by the Centre for Employment, Competitiveness and Growth,Kent Business School, at the University of Kent.

Promoting Sustainable Performance (PSP) takes amultidisciplinary approach to investigating competitivenessand growth for Small to Medium sized Enterprises (SMEs).

PSP is a valuable tool for identifying competitiveness andgrowth issues across SMEs highlighting productivityenhancing characteristics and encouraging increased levelsof engagement between SMEs and academia.

For enquiries in relation to this report please contact:

Centre for Employment, Competitiveness and Growth, Kent Business School, University of Kent,Park Wood Road, Canterbury, CT2 7PE, UK

Tel: +44 (0)1227 823797

Email: infoecg@kent.ac.uk

Web: www.kent.ac.uk/kbs/ecg

Written by:© Mark Gilman, Simon Raby and James Turpin2012 (First edition)

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2To find out more about the Kent Business School and theirprogrammes for ambitious owner-managers and SMEs visitwww.kent.ac.uk/kbs/business/sme

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Contents

PSP – The Kent Business School’s research &enterprise initiative for SMEs 2

BIG Ten: Introduction 4

BIG Ten: Star 5

The Characteristics of successful SMEsThe Enthusiast 6The Transformer 8The Strategist 10The Delegator 12The Innovator 14The Integrator 16The Calculator 18The Systemiser 20The Engager 22The Sponge 24

The BIG Journey: An executive developmentprogramme for ambitious owner managers 26

Watch a short video cartoon of The BIG Tenwww.kent.ac.uk/kbs/business/sme

The BIG Ten:an introductionThis booklet provides an introduction to The BIG Ten –the ten characteristics that set apart higher performingSMEs from their average counterparts.

Those SMEs that had achieved higher sustained levels ofgrowth were actively exploring and integrating The BIG Tencharacteristics. This booklet therefore provides an opportunityfor you to identify and develop personal and organisationalgood practice.

This booklet provides a summary of the full report ‘The BIGTen: The Ten Characteristics of Successful SMEs’ (Gilman,Raby & Turpin, 2012). The BIG Ten have been developed froman innovative research model – Promoting SustainablePerformance (PSP). PSP integrates quantitative and qualitativeinformation collated through a suite of surveys, personalinterviews, detailed case studies and focus groups with SMEs.

This research is informed by a multidisciplinary team ofresearchers at Kent Business School from a wide range ofbusiness management disciplines. National and regional policymakers, business associations and business support and advisorybodies have also provided advice and support to this research.

This booklet will now explore these ten characteristics ofsuccessful SMEs in more detail. We hope you find this useful.

Mark Gilman | Simon Raby | James Turpin

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The Enthusiast refers to the passion for the productor service that the business provides to its customers.This passion translates into a philosophy throughoutthe business of ‘doing things right’ and adding value.

This characteristic was found to have driven the growth ofmany SMEs in their early days of operation and remaineda fundamental attribute for product and service innovationand providing the inspiration for others to get on boardwith the vision of the firm.

What is argued here is that a loss of passion in the firm’sproducts and services can have a detrimental effect on firmperformance. This may manifest itself in wider issues suchas a limited product/service innovation or low levels ofemployee engagement.

Those individuals that shared their ideas and allowedthemselves to be challenged through meeting withlikeminded individuals were better able to reflect on theirpassion in an objective fashion.

The Enthusiast

The enthusiast• Sustain your passion• Do it right!• Add value

Maintaining a passion for the products and services has a positive effect on firm performance.

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THE ENTH

USIAST

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The Transformer relates to the ability to managechange, not only in the day-to-day operations of thefirm, but also providing space to think strategicallyabout the future.

Those SME owner-managers that released more time to work‘on’ the business and not just ‘in’ it were found to be betterpositioned to respond to change.

Most SME owner-managers often described themselves as‘busy fools’, whereas transformers were found to excel in theirability to strategically manage their way through periods ofcrisis and transition.

Transformers recognised that the way they managed the firmhad to continually change and evolve and drew upon internaland external expertise. Such an approach helped to drive amore proactive approach to managing the business along withchallenging the existing structures and systems within the firm.

The Transformer takes greater ownership over where thebusiness is heading retaining space for strategic planning.

The Transformer

The transformer• Anticipate change• Manage transition

...Key to managing change was recognising when change was necessary to jump to the next growth phase and overt crisis and decline.

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THE TRANSF

ORMER

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The Strategist refers to the importance of developing aclear vision and strategy for the firm’s future andsharing and embedding this throughout the firm.

Most SME owner-managers failed to create a strategic visionand plan for the business. Those that did struggled toarticulate their plan throughout the business.

The Strategist differed in that they dedicated time todeveloping a clear vision and strategy,

reflecting on the needs of a range of stakeholders (e.g.employees, customers, suppliers, financers etc.).

articulating and communicating the strategy across the firm.This will mean translating the vision and strategy intotargeted messages that can be understood by allstakeholders both within and outside the firm.

recognising that the plan is emergent and dynamic, andmust be reflected upon and reviewed regularly to ensurethat the firm reaches its destination.

The Strategist

The strategist• Define your vision• Articulate your strategy• Involve others

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THE STR

ATE

GISTA well-conceived and shared business

plan is key to growth.

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The Delegator relates to the ability to empower otherswithin the firm to deliver tasks that they wouldotherwise have to carry out themselves. Delegationunderpins a style of management that empowers staffto use and develop their skills and knowledge to theirfull potential.

Those SME owner-managers that delegated were more likelyto be running growth-oriented SMEs. Those that weresuccessful at delegation were able to clearly communicate thenature of the task being delegated, the scope/remit of the taskbeing delegated and where the employee might accesssupport and advice to carry out their tasks.

Delegation therefore promotes employee involvement andempowerment and the decentralisation of decision-makingpower. In order for delegation to be successful, structures mustbe put in place so that employees can act independently andassume responsibility within a scope for certain tasks.

Delegators were able to pull back from the day-todayoperations of the firm, releasing time to concentrate onmore strategic matters.

The Delegator

The delegator• Define structures• Share responsibility• Share information

Successful delegation involves communicating the task, defining its scope and providing employees with learning opportunities.

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THE DELE

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The Innovator recognises the need to develop newproducts and services and reduce the risk of “puttingall eggs in one basket”.

Owner-managers of growth-oriented SMEs placed a greaterlevel of importance on both product/service and processinnovation.

Innovators demonstrated an active appreciation of the needto research customers and develop an understanding of howto translate this knowledge into new products and services.Owner-managers of growth-oriented SMEs were also awareof the latest developments within their market sector andwere looking at other non-traditional markets to which theirproducts and services might apply.

Innovators were also seeking improvements to internalprocesses leading to increased efficiencies and improvedconsumer satisfaction through, for instance, reduced leadtimes and higher quality.

Innovators invested in training and networking to share bestpractice insights. Employees were also provided with timeto improve their ways of working. This helped overcomemuch of the resistance to change which found its basis inthe entrenched ways of working.

The Innovator

The innovator• Generate new ideas• Diversify products/services• Continually innovate & improve

Undertaking research into the needs of customers and consumers in support of product/service development can create competitive advantage for the firm.

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THE IN

NOVA

TOR

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The Integrator recognises the importance of valuechain relationships and the need to communicate anddevelop trust with suppliers and customers.

SMEs remain relatively unaware of the association betweengrowth and the development of dynamic value chainrelationships.

Those SMEs that understood the needs of customers andconsumers and how best to work in a collaborative manneroutperformed their competitors. This is because thedevelopment of value chain relationships affords a quickerand more accurate response to consumer needs and acts asa driver for improved performance.

SME owner-managers must therefore be comfortable inplaying a ‘facilitator’ role beyond the boundaries of the firmin order to maximise the potential for converting competitiveadvantage into profitability.

Integrators were more likely to share information with theirkey customers so that the products and services meet thedemands of the end consumer. Integrators paid closeattention to the needs of their supplier and customershelping them to develop competitive advantage.

The Integrator

The integrator• Collaborate & partner• Value chain • Customers & suppliers

Growth-oriented SMEs are more likely to share information so that the products and services supplied meet customer needs.

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THE IN

TEGRATO

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The Calculator appreciates the need to develop abroad range of performance measures and developsystems that provide accurate information uponwhich to base decisions.

SME owner-managers typically rely on basic operationalmeasurements such as total costs, volume of sales, profitlevels and return on investment ratios as a means ofassessing performance. These basic output measuresprovide little insight into the transformation processesbetween inputs and outputs and provide limited insightupon which to make informed decisions.

Growth-oriented SMEs take a deeper and more systematicand integrated approach to performance measurement.Calculators developed performance measurement systems(e.g. dashboards) that are better able to capture real timeinformation upon which to manage performance and takedecisions for continuous improvement and efficiency.

The information obtained from these sources provides thefirm with intelligence upon which to make continualupdates and adjustments to the firm’s strategic plan.

The Calculator

The calculator• Measure & monitor• KPIs• Make effective &

informed decisions

Appropriate performance measures are critical to ensuring that SMEs remain on course to achieving their aspirations.

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THE CALC

ULA

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The Systemiser recognises the importance ofdeveloping appropriate systems, practices andprocedures within the firm. These are not systemsthat result in increased levels of bureaucracy, butsystems that support increased levels of productivityand efficiency.

It was not uncommon for SMEs to implement qualitymanagement systems and accreditations as a marketingtool and not as a means of adding value or supportingcontinuous improvement. Accreditation documents wereoften reported to act as ‘entry badges’ and a necessaryprerequisite in the tender process.

Systemisers understood that the accreditation process wasmore than an ‘entry badge’ recognising that systems(e.g. quality, environmental etc.) should support a range ofefficiencies through continual process improvement andthat these systems were an investment rather than a cost.

Systemisers believed in the value of systems in drivingimprovements to productivity and quality and supportingthe organisation’s strategic objectives. Systemisersdeveloped processes that supported innovation,performance measurement and management.

The Systemiser

The systemiser• Develop new systems• Use technology• Continually innovate & improve

We found value in encouraging the development of a process improvement plan focused around employee contribution.

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THE SYST

EMISER

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The Engager recognises that the key to competitiveadvantage is the people within the firm, and that thedevelopment of the firm’s human capital is paramountto its future competitive success.

Evidence demonstrates that engaged employees are moreprofitable, customer-focused, safer and more likely to staywith the firm.

Getting the most out of employees within the firm hinges onthe value the leader places upon them. In order thatemployees feel a sense of ownership of the vision of the firm,the SME owner-manager must embrace the involvement andparticipation of employees in the decision-making process.

Engagers afforded employees discretion and autonomywithin their role. Employees appreciated being empoweredto contribute to wider business objectives. Engagersrecognised that employee engagement was seen to befostered through clear management direction and clear linesof communication.

The Engager

The engager• Employee involvement• Employee skills & knowledge• Motivate

Getting the most out of employees within the firm hinges on the value the leader places upon them.

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THE ENGAGER

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The Sponge places great value on the learning processand recognises the benefits of continuously developingknowledge. The Sponge is open to new ideas and newways of thinking and will seek out learningopportunities within and outside of their immediatebusiness context.

The ability to adapt and develop new learning and skills isfound to be a crucial ingredient in SME survival and growth.Those SME owner-managers that are open to external sourcesof information & advice (i.e. from customers, suppliers,networks, universities, etc.) and take advantage ofopportunities for capturing knowledge outperform theircompetitors.

The strength of the Sponge rests on their capacity for sharingand exploiting existing and new knowledge (labelled‘absorptive capacity’) across the firm. Growth-oriented firmswere far more likely to offer learning and knowledge sharingopportunities and train their employees in problem-solvingand teamwork skills.

The Sponge

The sponge• Seek learning opportunities• Exploit knowledge• Develop networks

Growth-oriented SMEs were more likely to offer learning and knowledge sharing opportunities to their employees.

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THE SPO

NGE

The BIG Journey: An executive development

Realise your potentand embark on

The programme works within the constraints of everyday business priorities and isbroken down into six highly practical two-day modules. The modules encourage youto work on your business rather than in it, and will challenge you to balance quick winswith longer term business improvement.

MODULE 1:REALISING YOUR POTENTIAL

MODULE 2:DEVELOPING A LEADINGMINDSET

MODULE 3:CREATING YOUR FUTURE

realising yourpotential

developing aleading mindset

creating yourfuture

designing yourstrategy

successfulimplementation

reenergiseand renew

The BIG Journey: An executive development programme for ambitious owner managers

Realise your potentialand embark on your BIG Journey

) +44(0)1227 824740 8 infoecg@kent.ac.uk

MODULE 4:DESIGNING YOUR STRATEGY

MODULE 5:SUCCESSFULIMPLEMENTATION

MODULE 6:REENERGISE AND RENEW

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TestimonialsBIG Journey programme participant testimonials.

It is something for anyone who owns abusiness and wants to grow and improvecan benefit from, and I’ve certainly seenthat myselfDavid Rushton, Director, Town and Country Cleaners

There is only so far you can take abusiness by yourself... it’s given a focusto our growth plansPaul Bailes, MD, Cohesion Design Services

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The chance to not only have advice andcoaching but to spend time with otherbusiness owners to learn from theirexperiences is something you wouldrarely get in other situationsHelen Fairley, MD, 6|2 Design

It will challenge your views on how thingsare done, introduce new ideas, andhopefully that will lead to a healthierbusiness and a happier lifeRobert Cooper, MD, Fabricsmart

To find out more about the Kent Business School and theirprogrammes for ambitious owner-managers and SMEs visitwww.kent.ac.uk/kbs/business/sme

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We would like to expressthanks to the research teamand research committee fortheir continued dedication,efficiency and expert input.We would like to showappreciation to the Universityof Kent’s Enterprise andInternational offices for theirsupport. We would also liketo express gratitude to themembers of central and localgovernment, businessassociations and advisorybodies that make up theproject’s advisory board.Finally, we are grateful for thecontinued support of TelosPartners who share ourambitions for creating betterfutures for SME owner-managers and theirbusinesses across the world.

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This is an abridged version of the full report written andproduced by the Centre for Employment, Competitivenessand Growth (ECG). ECG is an applied research centre basedat the University of Kent that focuses on developing andtransferring world-class research and expertise on work,employment relations, leadership and organisations.

Centre for Employment, Competitiveness and Growth,Kent Business School, University of Kent, Park Wood Road,Canterbury, Kent, CT2 7PE, UKTel: +44 (0)1227 823797 Email: infoecg@kent.ac.ukwww.kent.ac.uk/kbs/ecg/

To find out more about Kent Business School and theirprogrammes for ambitious owner-managers and SMEs visit:www.kent.ac.uk/kbs/business/sme

© Mark Gilman, Simon Raby and James Turpin 2012