SMEs account for 99% of private-sector businesses in the UK and contribute £2 trillion to the UK economy. The world of work is changing, resulting in barriers to SME growth and the only constant within this is change – the onset of industry 4.0 is evidence of this. A report by McKinsey (2017) estimates that by 2030, robots will replace 800 million workers worldwide. This fourth industrial revolution will see widespread change across the globe, and SMEs, in particular, will have to learn how to meet this change. Evidentially wide-scale adoption of small changes will have a greater economic impact than large scale adoption by a few.
According to CMI, the fourth industrial revolution will require managers to become ‘tech-savvy’ digital leaders, able to understand what technology can do for their organisations and be early adopters of new platforms and tools. Tasks that require creativity, problem-solving and social interaction will remain with human workers, and therefore managers must be intuitive, emotionally intelligent and exercise good judgement.
Organisations are not doing enough to prepare employees for the change in work activity, resulting in a widening skills gap for employees to step up to creative thinking and solution roles. The Bank of England cites a lack of management as one of the most important drivers of reduced productivity. Yet, we are a nation of ‘accidental managers’, with 70% of employers providing little or no management training (CIM 2019), meaning leaders are left to sink or swim. This lack of management training will continue to have a massive impact on employees, businesses, and the economy.
To solve this crisis, organisations must provide the right support to employees currently in managerial roles, and those looking to step up into those roles. The right support could take the form of a coach or mentor, but in small business especially this is not always possible due to lack of skills or time constraints. However, the benefits of providing a mentor or coach to employees are numerous. There are plenty of online resources and “diagnose yourself” type tools, but a coach/mentor will enable the application of findings from this type of activity within the business more effectively.
Additionally, the effect of having a community with which employees can share problems with, learn alongside, and build networks with that is on the outside of their own organisation is found to be good for engagement, support, and development.
SMEs are often priced out of the market when it comes to accessing world-class coaching and mentoring. Smaller organisations must utilise advances in communications to be able to deliver the right support to their employees such as external online mentoring. External mentoring is still seen as a significant cost, but with technology where it currently stands, online one-to-one coaching is now as effective as face to face through the use of tools such as Zoom, Skype, and other collaboration tools.
The impact of implementing external online coaching would be a significant return on investment. The economic impact is clear; when scoring management, a 0.1 increase in effectiveness would equate to a 10% improvement in productivity. A mentor or coach can guide management into finding the most efficient ways of working through encouraging ideation and improving on problem-solving capabilities whilst also improving social interactions with the rest of their team and others within the organisation.
To summarise, the cost of not providing the right support for management within an SME will be much greater than the investment cost. With the fourth industrial revolution well underway, organisations must take the initiative now to prepare their employees for significant changes in the way that we currently work.