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SMEs embracing greater flexibility and prioritising innovation

Written by Kate Cooper on Friday, 19 February 2021. Posted in Insight, Analysis

In 2014, The Institute of Leadership & Management undertook research to predict how the work of leaders and managers would change by 2020.

SMEs embracing greater flexibility and prioritising innovation

In 2014, The Institute of Leadership & Management undertook research to predict how the work of leaders and managers would change by 2020. As 2020 arrived, we revisited some of those predictions from 2014 and explored how leadership and management might continue to evolve in response to the changing business environment.

Flexing for the future

In that piece of research, we had predicted an increase in the amount and availability of flexible working we’d see by 2020, and, indeed, it is even more common than it was predicted to be in 2014. It’s an upward trend that has been accelerated by the Covid-19 pandemic, but it is still not a benefit that is available to everyone and for many relies on a core set of hours.

People in leadership and management positions are more likely to have access to flexible working arrangements than the people who work for them. Remote working is the most prevalent form of flexible working that is available to 72 percent of our leaders and managers. 59 percent report working around a core set of hours and over half reported working in multiple physical locations and working part time hours. 

Part time hours are still the most flexible working arrangement for more junior staff, with 60 percent of leaders and managers reporting that this is available for those they manage. Even without the accelerating impact of the pandemic, people’s expectations of where they work have obviously changed, with some organisations, including BT, operating a remote working policy for a number of years. We now have a situation where companies who previously resisted remote working have had to switch to it and reports suggest it has been successful for many, certainly on a personal level.  Earlier research had indicated the existence of a flexible working premium, with applicants for jobs being prepared to accept a lower salary in order to have more flexible work. It will be interesting to see whether this premium remains.

The shift towards work being something you do, rather than a place you go, is a result of many factors such as advances in technology, greater emphasis on family friendly policies and drives to reduce office costs, even without the necessity of the pandemic. Whatever the main driver has been, it requires leaders and managers to flex their own leadership and management practice. Managing people you don't see requires a different style, a different understanding of work flows and expectations, responding appropriately when assistance and support is needed; indeed, how to avoid micromanaging, how not to over rely on written communication such as email and to manage without the informal communication that takes place so naturally in an office environment. 

SME shifting towards innovation

Looking to the future, we asked people about their current priorities and what they might be in five years’ time, which revealed some interesting and really big shifts, particularly in SMEs. One of the most interesting being the change within medium and large organisations, moving from currently prioritising compliance with rules and procedures towards innovation. This increased emphasis on innovation was even more marked in small organisations, with 47 percent identifying it as their new priority, shifting away from focusing on putting people before profit.

Newly developed digital capabilities and increased confidence in using technologies to communicate has perhaps inspired a confidence that will extend to other processes throughout the organisation.  While there has not been sufficient data published to comment on the impact on productivity of homeworking, the speed at which so many companies were able to switch indicates a resilience and agility that could be transferable; something we can refer back to and say, “we did that quickly, why can't we implement other changes quickly too?”  However, a willingness to innovate does not mean innovations will happen. As with managing remote teams, embedding innovative practices in organisations requires a different, more distributed and less hierarchical style of management, and one that might be well suited to the smaller business environment.  

The pandemic has had a major impact on how and where work takes place. This research, highlighting a shift in priorities, suggests many of these changes will endure and is an interesting development on our earlier pre-pandemic research focusing on small businesses, which highlighted the need for problem solving and learning capability. Small firms that have flexed and pivoted in recent months have undoubtedly developed that identified capability gap.  We hear a lot about the new normal, but this research indicates that it's not about reverting to how things once were, but implies a new freedom to change things in order to do work differently, to be able to overcome the new challenges with a widespread acceptance of the need to innovate. 

About the Author

Kate Cooper

Kate Cooper

Kate Cooper, Head of Research, Policy & Standards at The Institute of Leadership & Management.

Kate shapes an innovative research programme to inform, inspire and impact the practice of great leadership wherever it happens.

Kate joined The Institute after a career as a senior academic in a university business school where her focus was strategy, leadership and professional development.

She is a conference keynote speaker and provides expert commentary on a range of topics arising from the Institute’s research agenda. She is regularly quoted in regional, national and international media.

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