A Lancaster University Management School Professor delivered an important message at the Houses of Parliament on the needs of small and medium-sized businesses (SMEs) as they pursue increased productivity.

Professor Martin Spring, Director of the Centre for Productivity & Efficiency, was speaking at the Industry and Parliament Trust event The Productivity Puzzle: Supporting UK SMEs in the House of Commons.

He told guests at the event that management practices in SMEs should be tailored to their particular circumstances and needs, rather than being based too much on the practices used in larger firms, and should recognise the huge variety of enterprises within the SME world.

A boost to productivity – one of the main goals of the Government’s Industrial Strategy – for SMEs – who represent 99% of all private sector businesses and 60% of all private sector employment in the UK – can only be achieved with a tailored approach to smaller-scale businesses.

“SMEs are an immensely varied category. In the UK, the classification is any business employing up to 250 people,” said Professor Spring. “An advanced manufacturing company employing 200 people and with a turnover of £20 million is an SME, but so is a hairdresser that employs five people. It’s important to recognise that huge variety within SMEs, and to realise that they cannot all be treated in the same way.

“Evidence from the Office for National Statistics and the Department for Business, Enterprise & Industrial Strategy suggests that productivity in SMEs is increased where there are structured management practices. But this is based on studies of bigger SMEs – it’s different if you are looking at a small start-up with 10 people.

“Our research here at Lancaster has looked at companies with fewer than 50 employees and we can see a different approach is needed. Management is still important, but with many smaller firms, it is the owner who is the manager, the person who is driving the enterprise, and leadership is not always the main skill they have. You can’t prescribe the same approach for everybody.”

Professor Spring was one of two speakers at the event, hosted by Adrian Bailey, MP for West Bromwich, along with Chris Manson, Chief Executive Officer of Newable, a company providing funding, professional support and premises for businesses.

He cited work he has done with SMEs in Lancashire, through Lancaster University’s Productivity Through People and Made Smarter programmes, and the benefits gained from bringing SME leaders together in an environment where they are able to exchange ideas.

Professor Spring added: “One thing that works particularly well in inducing best practice among SMEs is contact with their peer networks. Based on years of experience and research at LUMS with businesses in our programmes, we’ve found that experiential learning within peer networks is fabulously powerful as a method of improving operations.

“Programmes such as Productivity Through People and Made Smarter allow these small business leaders to bounce ideas off each other and to work with people in similar positions to themselves. Being a small business owner can be a lonely affair, but this interaction allows them to experiment, to develop ideas, in a safe and trusting environment.

“Government can and does support SMEs, but they need to do more to bring these businesses together within spaces such as universities, where they can learn and benefit from each other. This gets managers working on the business, as well as working in the business – one or two days a month doing this can really make a difference.”