Evolution of Business Knowledge helps SMEs

Create knowledge. Make an impact.

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Summary

Research by Professor Richard Thorpe on management learning and leadership in small and medium-sized enterprises (SMEs) has benefitted three groups: (i) business education providers (universities, colleges and training organisations), who have used the research to improve the training and education they provide for SMEs; (ii) SME owner-mangers who have been able to build on their entrepreneurial behaviour and improve their strategic planning through tailored business training programmes; and (iii) government, regional and sector policymakers, who have used the research in policies designed to generate growth in SMEs.   

Our research

In 2003, it was well-known that many business owner-managers did not value traditional approaches to learning, such as taught management programmes and textbook knowledge. CTIE's research examined how managers acquired knowledge and identified ways that they could learn more effectively, which could significantly enhance the performance of a business.The Evolution of Business Knowledge (EBK) ESRC-funded programme focused on how businesses acquire knowledge and found that it can be implicitly transferred through various mechanisms, including business networks, supply chains and professional advisors, and embedded in work practices and systems. Parallel streams of research addressed the way managers learn particularly through action learning and best practice in management training and development.The EBK model, developed in collaboration with colleagues at Liverpool and Lancaster, was instrumental in the 2006 decision to form the Northern Leadership Academy (NLA), a partnership between the Universities of Lancaster, Leeds and Liverpool. The NLA set up regional centres for delivering leadership courses, action learning sets for SMEs and other services. This experience formed a platform from which a number of SME leadership/business-growth programmes were delivered by collaborators from across the north, as well as the infrastructure that attracted Goldman Sachs to launch their first pilot for the 10,000 Small Businesses programme at Leeds. 

Impact

Distributing knowledge through the Northern Leadership Academy 

The NLA network of business training partners which extended the original NLA project to focus on SMEs helped training providers to adopt best practice in their educational programmes through a range of learning resources and introduced SME owner-managers to the importance of creating ‘strategic space’, in which they focus on business planning and strategy rather than day-to-day operations. This led to improvements in their business performance. 

Direct business support

In 2010, Leeds University Business School launched the first Goldman Sachs 10,000 Small Businesses Programme in the UK, which provided high-quality, practical support to the leaders of established enterprises. Seven cohorts (164 businesses) had completed the programme by July 2013. In 2011/12 the programme was rolled-out to other areas of the UK (Manchester, Birmingham, London), with specific support delivered by the Business School  to Manchester and Aston Universities.

The Goldman Sachs programme was an award winning entry in the European Foundation for Management Development’s Excellence in Practice Awards 2012. The programme has been evaluated to indicate that as well as expressing greater confidence in growing their businesses, SME owner-managers on the programme have average net employment growth of +23% in their businesses (compared to -1% for UK Small Businesses) and an average revenue growth of +16% (compared to -9% for UK Small Businesses).

The research has been used by policy makers enabling them to identify new opportunities to stimulate SME growth and benefit the economy. Having met with David Willetts MP, Minister for Universities and Science, Thorpe was invited to join the BIS Mid-Sized Businesses’ Programme on the Harnessing Leadership Capability Task Force, chaired by Professor Cox.

Regional and national policy on SME support

Thorpe also met with Sir Andrew Witty’s team (July 2013) who were taking evidence from an Association of Business School’s report (authored by Thorpe and Rawlinson of Booz & Co) for the Independent Review of Universities and Growth, in relation to Business Schools and SME development. Preparation of the ABS report led to discussions with Lord Young in relation to his Enterprise initiative and this led directly to business schools becoming involved in developing the Enterprise Charter.

Research outputs

  1. Thorpe, R., Gold, J., Anderson, L., Burgoyne, J., Wilkinson, D. and Malby, B. (2008) Towards ‘Leaderful’ Communities in the North of England. Stories from the Northern Leadership Academy. Second Edition. Ireland: Oak Tree Press

Research grants

  1. Thorpe, R. (PI), with Jones, O., Holt, R., Macpherson, A. and Sharifi, S. (2003), The Evolution of Business Knowledge in SMEs, Economic and Social Research Council, £364,000 of which £74,000 to Leeds  [RES-334-25-0015]
  2. Thorpe, R. with the Universities of Lancaster and Liverpool, Northern Way: Northern Leadership Academy (1/1/2006 to 31/3/2008), Funded by the three northern RDAs, Thorpe was PI on the Think-Tank component. £4.8m of which £666,903 to Leeds plus £141,000 to create NLA Centres across the north to support SMEs
  3. Business Growth programmes: Thorpe, R (academic lead), Whieldon, R (programme manager), to date £248,814 for Yorkshire Centres (funder Yorkshire Forward), £140,000 for Leadership Journies (funder: Yorkshire Forward), £149,889 for SME Knowledge Network (funder ECIF/Yorkshire Forward) and £2.7 million Goldman Sachs programme
  4. Thorpe, R. (PI) with Jones, O. and Macpherson, A., (2007), Making Space for Development – developing high-level skills for business growth in SMEs, Economic and Social Research Council, Impact Grant, November 2007, £32,227 [RES-172-25-0056]
  5. Thorpe, R. and Jones O., (2010), Growing a Regional Network to support leadership development in SMEs, Economic and Social Research Council, Follow-on Grant, £76,709  [RES-189-25-0191]
  6. Thorpe, R., (2003) An Evaluation Study into the North West Networks of Small and Medium Sized Firms, Northwest Regional Development Agency (£50,000)

Reports

Association of Business Schools’ Report: ‘The Role of UK Business Schools in Driving Innovation and Growth in the Domestic Economy’, authored by Thorpe and Rawlinson of Booz & Co, May 2013Business Schools MSB Task Force report, ‘Business School/Mid-Sized Businesses (MSB) Collaboration – supporting growth in the UK’s mid-sized businesses’, November 2012

The research team

  • Richard Thorpe
  • Jean Clarke
  • Jeff Gold (Leeds Metropolitan University and Visiting Professor at Leeds University Business School)
  • Robin Holt (formerly at University of Leeds, now at University of Liverpool)
  • Allan Macpherson (De Montfort University)
  • Luke Pittaway (Ohio University and Visiting Professor at Leeds University Business School)
  • Oswald Jones (University of Liverpool)