26/05/2010

By Brian Chernett, CEO, The Acamedy for Chief Executives

A new UK Government is getting to work, putting in place policies to reduce the deficit whilst growing the economy. My belief, expressed frequently here, is that growth when it comes will be fuelled by small to medium enterprises (SMEs) and it seems that the new Government may recognise this. Vince Cable, Secretary of State for the Business, Innovation and Skills Department has appointed Mark Prisk as a Minister of State. As a Shadow Minister, he had responsibility for small business and it is believed he will retain this.

Mark Prisk’s views on supporting business growth, and particularly Business Link as the agency delivering that support, were aired in the Times in February (www.timesonline.co.uk) under the title ‘We need to halt the meddling’.

According to journalist Rachael Bridge, who wrote the article, “Should Mark Prisk find himself in the corridors of power" later this year, one of his first acts as a Conservative small-business minister would be to scrap Business Link. The advisory service, which costs £190m a year to run, is in the gun sights of the shadow minister for business and enterprise. “We believe that regional Business Links are failing in their task,” said Prisk. “Many surveys show that only a small proportion of businesses use them and those that do are dissatisfied with the service they receive.”

He is also quoted as saying, “What businesses need is clarity and certainty so they can get on and create the wealth and the jobs. Our job will be to support them but in a way that will free them to do what they do best. That is a very important shift. Government does not know best when it comes to free enterprise.”

So if Government doesn't know best, then who does? Maybe, in the spirit of the ‘Big Society’ initiative that the Government is also proposing, businesses should have more of a part to play in deciding, developing and delivering that support.

Doug Richard, former Dragon and Business Angel, set out his Entrepreneurs Manifesto — Empowering the New Wave in January this year - (download from www.schoolforstartups.co.uk). In the Declaration of Rights, Richard suggests that, amongst other things, we need “to empower people to step out on their own, take risk, hope for reward, and move on from failure”. The corrosive effect of an overprotective state, he suggests, prevents that happening. He concludes, “Entrepreneurship can be taught and must be learned”.

The Academy for Chief Executives has been providing peer support for Senior Managers in SMEs for many years. We believe that the best people to help business leaders are other business leaders —people who are at the top of their own businesses.

What businesses need, I believe, is good signposting and access to relevant resource, access to funding which makes it easy to apply and is supported by results orientation and quality assessment. I am a believer in experiential learning, provided regularly and in ways in which it can be applied to the business immediately. The Academy approach brings together expert trainers and speakers, peer experiential learning in ‘issues’ sessions and coaching and mentoring from successful business people in stable, consistent groups where members get to know each other. The Enterprise Initiative was a good example of Government support that worked for many businesses. Once accepted into the scheme, the company could choose consultancy or training from an approved list of providers, drawing down what they needed, as they needed it with an assessor reviewing and signing it off. The incentive was that there was a 50% grant for businesses taking part, something that may be harder to justify in the present economic cycle. I agree with Mark Prisk that Government shouldn't deliver support directly. Their role is to enable an environment of business growth, to fund what and where they can, to administer funding effectively without red tape and to let business support business.

As I began this article by saying, growth will come from small and medium enterprises. They need support, encouragement and advice from, their peers. That approach will be much more potent than an academic or government led approach.

Vince Cable is setting up a Business Advisory Group (www.postonline.co.uk/post) to give him ‘private and informal’ advice. He said, "Tackling the challenges facing business requires new ideas from a range of experts. Economic knowledge and commercial experience are essential to developing policy and this new panel will be critical to finding new ways to move the economy forward." Amongst the commercial experience, he should be looking to involve business leaders who understand, and are preferably involved in SME business. I will watch with interest and comment further as this policy area develops.

Watch a video of Brian Chernett sharing his ideas on how leadership is changing in the business world.

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Brian Chernett is founder of The Academy for Chief Executives (ACE) - He has 43 years' experience as managing director of private and public companies, including subsidiaries of Booker Bros McConnell, the Landmark Group, and several other major companies. Find out more at www.chiefexecutive.com. We always welcome your feedback on the articles. Email them to brian.chernett@freshbusinessthinking.com

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