Leadership: Its Role Within Small and Medium-sized Enterprises

In this chapter, we will be exploring the role of leadership within small businesses. Leadership is an essential element in the management of any organisation and is even more crucial when it comes to small businesses. In particular, both the structure and the specific stage of development of small businesses determines the need for an evolving style of leadership. Unlike their counterparts at larger organisations, small business leaders usually have a higher level of hands-on involvement across multiple areas of responsibility, including strategic decision-making and financial management, as well as team leadership and motivation.

Some key leadership skills, such as having a clear vision, communicating successfully across all business levels, leading by example and keeping the team engaged, are shared by all enterprises, regardless of size and nature. It is critical for small business leaders to understand that each stage of an organisation’s lifecycle brings with it different opportunities and challenges that should be dealt with by adopting different leadership techniques. A ‘one-size-fits-all’ approach will not work, and could even become detrimental in the long term.

During an organisation’s early days, a leader’s main role is to inspire the individuals they work with by sharing their vision and purpose without the need for formal management processes. In this chapter, we will be exploring the above issues in relation to the role of leadership within small businesses in greater depth.