A third of UK SME owners consider their own management team a barrier to growth

By Michael Davidson, Haines Watts

More than one in three (35%) business owners in the UK fear that their management team will cause them to hit a growth ceiling. Their concerns are legitimate – over half (53%) of management teams have never helped grow a business prior to the one they now work in.

Business owners and the teams that support them have to work hard to put the planning and communication in place that can overcome the challenge of experience and unleash their businesses’ growth potential. According to research conducted among 500 UK SMEs by top 15 chartered accountants Haines Watts, there are several obstacles to overcome:

Poor planning

More than four fifths of business owners (84%) are only able to spend between 1-10% of their working week planning for the future. In contrast, business owners who are able to step back and focus predominantly on planning are more than twice as likely to run fast growth businesses (annual growth greater than 15%). Despite that, these strategic leaders only constitute 9% of UK business owners.

On the other hand, SMEs with low growth (less than 5%) are less likely to have a full strategic plan and are more likely to describe their business plan as nothing more than a financial forecast for the bank - true for more than half (53%) of low-growth SMEs.

Failure to communicate

Despite almost half of business owners lacking trust in their management teams, the teams themselves don’t realise that trust isn’t there. Four fifths (83%) of senior managers believe they fully understand the business owner’s goals and even greater numbers (87%) hold the often false belief they would be trusted to run the business even in the owner’s absence.

Perhaps most worryingly of all, more than half of business owners (52%) find themselves hiding their concerns from their teams because they are worried about showing vulnerability.

Lack of support

Even among business owners that have a full formal management team, only just over half (60%) believe that they have the full support of that team. At the same time, almost one in five senior managers (17%) are actively aware that they have a divergent vision of the business’s future to the owner.

The perceived lack of support is so stark that close to half (42%) of UK SME owners believe that their business couldn’t survive more than a single week without them at the helm.

Michael Davidson, regional managing partner at Haines Watts, comments:

‘Because many management teams aren’t unified behind a strategic business- wide plan, and because they often don’t possess the complete trust of the business owner, the knowledge essential to the future success of the business is locked up in the heads of just one or two people.‘This leaves management teams siloed, uninformed and restricted from stepping up. As a result owners have to think operationally and so have less time to plan and think strategically which in turn prevents them from reaching their own growth ambitions.‘For SMEs, which are often considered the engine room of the UK economy, the impact of this trend can be damning. Responsibility falls on business owners who fail to take the hard decisions about who makes up that team and fail to provide senior managers with a unifying vision for the future of the business, or the freedom to deliver it.’

About the study

The study is based on interviews with 500 owners of UK businesses, which are at least two years old, have a turnover of between GDP 1 million and GDP 50 million and have between 10 and 249 employees. The study was conducted in 2017.


Michael Davidson

Michael Davidson

Haines Watts, More than 60 offices throughout the UK
T: +44 252 510 333
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Published: May 2018 l Photo: Gorodenkoff - Fotolia.com

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