Challenging times

We all know now is a challenging time for business leaders.  Reading two reports , one (from the Enterprise Research Centre (ECR)) on small British Businesses and one (Harvard Business Review) for corporate leaders Thomas Jardine & Co came up with some common themes. We would love to hear your views.

The State of Small Business Britain 2024

Last year was challenging for business leaders.  The ERC report, The State of Small Business Britain 2024, highlighted four themes around leadership for private businesses.  They covered inclusivity, wellbeing, new ways of working and changing mindsets.

Inclusive and Diverse Leadership Drives Innovation

ERC’s research shows that greater workforce diversity and inclusive working practices are strongly associated with higher levels of innovation activity. In essence, leaders who actively cultivate a diverse team not only enhance creativity but also improve the firm’s capacity to innovate. This finding underscores how embracing different perspectives isn’t just a matter of social responsibility, it can be a critical competitive advantage for small businesses.

The ‘Attitude to Action’ Gap in Workplace Well‑being

Leadership isn’t solely about driving revenue or strategy, it also means caring for people. The report highlights that while many small business leaders recognize the need to address workplace mental health, there is a significant gap between intention and execution. For example, even though a larger percentage of firms believe they should implement mental health initiatives, the actual uptake lags behind by about 20 percentage points. This suggests that many leaders are aware of the issue but may lack the strategies or resources to translate that awareness into effective action.

Challenges in Adapting to New Ways of Working

The report also discusses the impact of changing work practices on leadership. With the rise in remote and hybrid working, leaders are facing new challenges in maintaining team cohesion and ensuring effective collaboration. While a majority of employers (72%) agree that remote workers are happier, a significant number are concerned that these arrangements impair team working and interpersonal interaction 53% of employers noted that teamworking had become more difficult with remote setups. This creates a leadership challenge: finding a balance between flexibility and the interpersonal dynamics that drive collaboration.

A Call to Reassess Leadership Mindsets

Embedded within the report’s manifesto for small business growth and productivity is a clear call for change: UK small business leaders are urged to challenge their existing ambitions and management mindsets. By re-evaluating their approach and adopting a more sustainable and growth-oriented leadership style, leaders can better navigate economic uncertainty and drive long-term productivity. This includes not only strategic knowledge but also skills in areas such as managing employee wellbeing and adapting to digital and hybrid work environments. 

These insights collectively suggest that effective leadership, as seen by ERC, is about balancing the drive for innovation and growth with a genuine commitment to employee wellbeing and adaptability in a changing business landscape.

Leadership fitness: four capacities leaders must develop

There is a clear conceptual alignment between the leadership challenges outlined in the ERC report and Harvard’s framework of leadership fitness, namely the dimensions of balance, endurance, strength, and flexibility, which is what we are using to fine tune our leadership program.

Balancing Competing Priorities.

Harvard’s notion of balance refers to a leader’s ability to juggle different priorities effectively. In the ERC report, small business leaders are urged to balance the drive for innovation with a genuine commitment to employee well-being for example, addressing the “attitude to action” gap in mental health initiatives. This is akin to Harvard’s idea of maintaining equilibrium between operational demands and the human aspects of leadership.

Endurance in Sustained Leadership.

Endurance, as Harvard describes, is about staying the course and remaining resilient in the face of continuous challenges. The ERC report highlights the enduring difficulties in adapting to new work models such as remote or hybrid working environments and the need for leaders to keep pushing forward despite these challenges. Leaders are encouraged to adopt strategies that foster long-term sustainability and growth, which directly mirrors Harvard’s emphasis on endurance as a key leadership capacity .

Strength in Decision-Making and Clarity.

Strength in the Harvard framework relates to having a clear vision and the decisiveness needed to navigate difficult decisions. The ERC report calls for a re-evaluation of leadership mindsets, encouraging leaders to adopt a more sustainable and growth-oriented style. This insistence on clear, proactive decision-making parallels the idea of strong leadership that Harvard underscores

one where leaders are not only strategically sound but also capable of leading with conviction.

Flexibility in Adapting to Challenging Times.

Finally, flexibility in Harvard’s model is about adapting one’s leadership style to meet evolving circumstances. The ERC report discusses the challenges of team cohesion under remote working conditions and suggests that leaders need to adjust their management practices to fit this new work paradigm. This adaptability is the essence of flexibility as defined by Harvard, where leaders must be agile enough to manage both technological shifts and the changing dynamics of team interaction.

While the ERC report does not explicitly label these capacities using Harvard’s terminology, its insights and recommendations illustrate the same underlying principles. Both frameworks emphasize that modern leadership is multifaceted; it requires a balance between competing priorities, the endurance to persist through challenges, the strength to lead decisively, and the flexibility to adapt to rapid changes.

Want to talk about your leadership fitness?

Thomas Jardine & Co are currently developing a new leadership fitness program with the Halcyon Club and would be happy to talk to you about your needs.  Contact us and we can have a no obligation chat.