This article was first published at

A business strategy defines a business by giving it a set of values and purposes. It will provide you with a clear roadmap – a destination and a map showing the way.

Leadership skills for the SME business owner

But how do you breathe life into a strategy, keep on track, make it happen and achieve your goals? To do this you will need a driver, and this comes in the form of effective leadership!

Having effective leadership within your business will ensure that your business strategy is successful and your business reaches its full potential.

Sounds easy right, but what if this is your first business venture and you don’t possess any leadership skills?

This article is designed to help you to understand why leadership is important for business owners and how you can improve your leadership skills, get the most out of your team and ultimately achieve your business vision.

Before we continue, we are assuming that your business has a clearly defined strategy in place because we believe that combining effective leadership with a defined business strategy is paramount to your business’s success.  Read Business Doctor, Paul Shaw’s article The importance of a Business Strategy for more information.

Leadership skills and the SME

Leadership in business is the process of directing workers and colleagues to work within the business strategy to achieve your company goals.

For the SME business owner, the roles of management and leadership often become blurry, especially where the owner/founder is involved in all aspects of managing the day-to-day business operations and ensuring the business runs smoothly and efficiently.

Leadership on the other hand will focus on inspiring and motivating people within your business in order to drive your strategy forward, and this requires a very different skillset.

A good starting point is to involve your people in your vision, discuss the challenges, get their input and use their feedback constructively.

You will need to develop strong interpersonal skills and be able to recognise what drives individuals and be aware of their strengths and weaknesses.

Motivational skills are a must and your ability to inspire others, are qualities that will help you to get your people to go the extra mile, as you champion the direction your business is heading.

Bringing the best out of people

Lolly Daskall, author of the national bestseller, The Leadership Gap: What Gets Between You and Your Greatness says that learning how to bring out the best in others is one of the most important things you will ever do as a leader.

The effectiveness of your business strategy will depend upon how motivated and engaged your people are. Business Doctor Graham Robson believes that the staff of the organisation, whether it is 5 or 500, needs to be engaged and feel part of the development of the strategic direction of the business. He says they need to feel that their contribution counts. Here are our top 5 tips on how to bring the best out of your people and achieve your company goals.

  1. Believe in your team

Before we talk about developing people, you should evaluate your team – do you believe you have the right people in the right roles, are there any adjustments that need to be made? If you are happy and confident that the team is capable of driving your strategy, be sure to let them know you believe in them.

  1. Have a clear strategic direction

A team that has been presented with a clear plan is more likely to succeed and if you involved them in the initial planning process, they will be more likely to go the extra mile for you.

  1. Lead by example

Demonstrate a positive attitude, strong work ethic and high standards at all times and your team will follow your example.

  1. Empower your people

Allow your people to make their own decisions, find solutions and work through challenges. Offer your support and remember to provide constructive feedback when things go well and/or not well.

  1. Provide regular feedback

Be honest and positive, show empathy, always be constructive and give plenty of praise when your people deliver. Public praise works well when appropriate but constructive criticism should be always given in private!

Motivating and inspiring to action

Employee motivation is key to your organisation’s success. Without it, you will experience lower productivity levels and will undoubtedly fall short of achieving your strategy.

Within a business, there are five key components that will help you to motivate your people and inspire them to be the best they can be.

Share your vision and mission statement

It will be easier for you to inspire your team if you have a compelling vision and mission statement. At Business Doctors, we believe that the starting point for developing an effective team is in developing a ‘business vision’ a reason why the organisation exists built from the core values and beliefs of the ownerYour mission should include your purpose to customers, suppliers, and the media. If you need help creating your vision, refer to our previous posts for more information. Business Vision, Mission and Values by Business Doctor, Paul Shaw and – How to build a values-driven business, by Business Doctor, Jason French.

Encourage open communication

Encourage open communication within your business – listen and recognise when action needs to be taken, it will help you to understand what is affecting an individual’s performance and you may be able to offer some solutions.

Promote health and wellbeing

Promoting healthy habits within your business can help to reduce stress and maintain staff energy levels. You should have clear policies to promote wellbeing, such as health and safety, working time, sickness absence and return-to-work.

Give recognition and rewards

When employees achieve positive results, perform well, or generally demonstrate good behaviour, take the time to praise them and be specific about why. This can have a huge impact on staff morale. Think about other tangible ways of rewarding positive behaviour to encourage a good culture within your business.

Provide opportunities for development

Consider your staff needs and look out for any training opportunities, show them you care about their progression within the business.

Take a look at our blog post on Employee Motivation for some other helpful tips.

Improved business results

Having a robust business strategy in place that is being driven by an effective leadership team is key to unlocking your true business potential.

When you have developed a strong set of leadership skills, you will be able to recognise when your staff are not putting in their best performance. This will enable you to take positive action before your overall business performance starts to suffer.

Gallup study reveals that “85% of employees are not involved in the work. This staggering statistic confirms what we already think – most employees give their time for the sake of making money and therefore are delivering their best efforts, in other words, they only do what they are asked to do without any enthusiasm or desire to put any extra effort in.”

Gallup also reports that “increasing an employee’s level of engagement can improve performance by 20 per cent or more. On a larger scale, this individual performance boost can have a huge impact on the company’s performance, re-enforcing that happy employees tend to be more productive.”

The fact is that poor employee performance can result in massive losses for businesses but with strong leadership in place, staff will be motivated, happy and be more effective.

Staff morale

Developing a motivated and engaged workforce is key to achieving a healthy company culture. When company morale is high, your company is more likely to hit key deadlines, improve customer satisfaction and be more profitable.

A happy workforce will result in stronger internal relationships, as well as better relationships with suppliers and customers alike.

The Harvard Business Review reports that there is a strong statistical link between employee well-being reported on Glassdoor and customer satisfaction among a large sample of some of the largest companies today. They claim that a happier workforce is clearly associated with a company’s ability to deliver better customer satisfaction.

Whereas, The Corporate Leadership Council reports that a high level of employee morale and engagement reduces an employee’s probability of quitting by up to 87 per cent.

As well as being more productive and enjoying improved relationships, happy staff are less likely to leave your business, so you have continuity and avoid the costly process of hiring and retraining.


We hope that this article has helped you to understand why leadership skills are so important for SME business owners.

After reading this, you may recognise that your business could benefit from improved leadership skills, and we can help! Our advisors regularly run free seminars and workshops and will be happy to provide you with advice on the subject. Get in touch with your local Business Doctor for more information.