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SME lessons: Just enough structure to harness creativity

In the third of a series of four articles, Vlatka Hlupic describes the principles of maintaining a highly-engaged workplace in small and medium-sized organisations

In a corporate environment a common challenge when trying to create a more engaging workplace culture is a legacy of ‘command and control’.

There may be too many meetings and too many rules, making fast decision-making and adaptability difficult. In a small enterprise, especially a young and fast-growing one, there can be the opposite problem –plenty of energy and dynamism but not enough structure.

There is a delicate balancing act to build in sufficient formality that the organisation is coherent, without killing off entrepreneurial spirit. It is a similar balance to that required in a large corporation, but often approached from a very different starting point.

For my most recent book, I interviewed more than 50 business leaders from all parts of the economy. Some working at small and medium-sized businesses (SMEs) reported ingenious ways of ensuring sufficient structure and accountability while maintaining an enterprising ethos with autonomy for staff.

At Brand Velocity, a US-based management consultancy, founder Jack Bergstrand has cleverly combined traditional discipline with flexibility.

Much of the infrastructure, such as email and accounting, is handled centrally while personal infrastructure such as phones and computers are managed by the individual – subject to measures designed to ensure security and encourage co-operation. The compensation system is points based rather than hierarchical; it is based on the value added by the consultant.

Attracting and retaining the best people can be a significant challenge for SMEs. You don’t have the recognised name and sometimes cannot afford the most generous packages.

To attract skilled people you have to offer opportunity, a rich learning environment, and an enjoyable workplace. Propellernet, a digital marketing agency in the UK, has a ‘Dream Ball’ reward. It involves every staff member deciding on their dream trip or event, and when the company hits a target a member of staff is chosen by lottery and wins the award. Examples have included a trip to the football World Cup and a skiing holiday.

Another UK firm, Obelisk, has pioneered a novel approach that has minimal organisational structure. Most of its employees are remotely located.

It is a firm of lawyers, 80% female, set up to offer lucrative career options for those who wish to combine work with domestic responsibilities. They are supported by a small central office-based team, which is all female.

Stelio Verzera is the founder of Cocoon Projects, based in Italy. He has coined the term ‘Liquid Organisation’, to describe the ultra-flexible organisational model that he has devised.

The Liquid Organisation is based on the principles of openness, inclusiveness and leanness. A key feature is the concept of ‘contribution meritocracy’ – assessment by how much your peers feel you have contributed.

Through my research I have identified key strategies for SMEs. Some of these are:

  • Hire on the basis of a personality, character and cultural fit, not just the CV.
  • Look after employees and they will look after the company (thank them for that).
  • Adopt a mindset of anything is possible. 'How can we live amazing fulfilled lives and make this organisation a vehicle to enable that?', instead of 'here is your job description'.
  • Form a community of other entrepreneurs, meet once a month and support each other.
  • Remove information processing bottlenecks. It is impossible for one person at the top of the company to have knowledge required to make all decisions adequately.

It may be thought that high enthusiasm and engagement come naturally to an SME but in practice much intelligent effort is required to ensure they are present. Some of the strategies are different to those required in a corporation, but the essential balance of structure and engagement are common to both.

Vlatka Hlupic is a professor of leadership and organisational transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting

The next article looks at how the principles of Humane Capital apply in the non-profit sector