A Practical, Sustainable Approach to Countering the Challenges Facing Small and Medium-Sized Enterprises

Jul 29, 2025

Executive Summary

Small and medium-sized enterprises (SMEs) in the UK and Ireland, as across Europe, face unprecedented challenges in today's rapidly evolving business landscape. These enterprises, which constitute 99% of all European businesses and employ over 88 million people1, are grappling with complex issues ranging from financial constraints to workforce shortages. Taking a systematic approach to individually work through each of these challenges is no more practical for a small business owner or leader than it is for the CEO of a global multinational corporation. SMEs can succeed by mimicking how some organisations have become known as innovators by enabling their teams to effectively target strategic objectives. In fact, this is an approach that can help SMEs compete more effectively with many larger businesses who don’t have the agility to do so. This is a discussion of a “strategy for strategy” that can enable businesses to leapfrog competitors and compete with larger corporations.

This article is a precursor to a number of articles I’ll present that outline in a little more detail the elements of the Enable Thriving Business (ETB) Whitepaper, a comprehensive, yet relatively straightforward framework that a small business can practically implement to drive results.

Close up image of a navigation compass — Photo by manas rb on Unsplash

Setting Some Context - The Challenges

While today’s business challenges are unprecedented, the reality is not that every issue is entirely new or without precedent. It’s the convergence of numerous complex, simultaneous “wicked problems” that makes the current environment especially difficult for businesses to navigate. This is described as the VUCA environment (volatile, uncertain, complex and ambiguous). These challenges are presented in general terms in this whitepaper.

Note: I have used AI to do deep research on these topics. I use AI to shortcut the process of achieving better results, more efficiently by using it to critique my assertions and to present opposing perspectives to negate bias. SMEs should explore how AI and other cost-effective technology can help to make you and your team more effective.

However, to be a little more specific, to set the context for this article and to challenge my own assumptions and experience, I tasked Perplexity AI to outline the specific challenges for SMEs arising from published narratives elsewhere. Unsurprisingly, it didn’t throw up anything that was unexpected. Here’s a short summary of the research it identified from a variety of recognised sources, that I’ve also referenced at the end of this article.

(Bear in mind, if your business is not directly experiencing these or similar challenges, many of your customers and/or suppliers are.)

SME Challenges

An Even More Compelling Challenge

I rely on a regular basis upon highlighting CEO concerns raised in the 27th PWC Global CEO survey about the future viability of their businesses, to galvanise the need for alternative strategy. While these concerns are boiled down quite nicely by the survey hosts to manageable factors for which they can provide consulting services. The reality is that for many of these CEOs there is a vague recognition of something more existentially damaging than the “climate opportunity”. This is referred to as materiality to avoid the discomfort of having to engage too much, off the balance sheet, but causes a cognitive dissonance in those same survey respondents as well as many leaders in the business world.

It’s referenced as materiality to avoid the discomfort but materiality is hiding something much more threatening. The evidence points to and this respected arkH3 resource asserts that current business strategies to serve stakeholders are failing because they ignore how severe environmental problems are. The planet upon which we rely for everything our businesses make, build, buy, sell is being depleted and damaged at a rate that will not support our future economic expectations. This means leaders are not meeting their legal duty to protect their companies.The authors predict massive global disruption in the 2030s and an economic collapse by 2050, so businesses must make radical changes now to survive. Even if they have the timing wrong in any way, the science community has been telling us for decades about our planetary boundaries.

Addressing The Challenges

When I sought a similar report from a number of AI tools discussing solutions for these challenges, the responses were much less informative. There were numerous and repeated citations of “Big 4” consultancies and their action plans, although most are suitable for much larger organisations or those with deep pockets only (and let’s face it focus relatively exclusively on their unique perspectives which centre around areas of practice in which they have invested for many years).

There was, of course, mention of the many government programs such as those run by Local Enterprise Offices, Enterprise Ireland and Intertrade Ireland in Ireland and the Department for Business, Energy & Industrial Strategy in the UK. All which provide fundamental financial support, training, mentoring and other services that SMEs should utilise to their best advantage.

There are also a plethora of public and private institutions that provide effective approaches to each of these challenges individually. I won’t go into the details of these but I’m happy to share that with you. Message me if this would be of use, although my recommendation would be to get familiar with how AI can help you with these resources.

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What is apparent, is that while there is a range of business challenges that persist, workforce-related difficulties have emerged as particularly acute, driven by changing demographics and evolving generational expectations. This, once again, validates the perspective I shared in the “Beyond Business as Usual” blog linked previously.

Having spent many years successfully turning around the “impossible”, failed or underperforming initiatives - and frequently without substantial resources - it is clear to me that with the right approach, or framework, it is possible to motivate and enable teams to achieve outstanding results, regardless of the surrounding circumstances. It is precisely this that SMEs can leverage, so that you as CEO or MD can rely upon a whole team approach to the challenges of the VUCA environment.

Talent is Strategy

As I mentioned, having spent years taking on and driving all manner of initiatives, essentially workforce mobilisation - specifically enabling teams to act in concert with strategy - represents the greatest untapped opportunity to business.

In fact, when enabled with technology the workforce can generate the greatest opportunities for SMEs to navigate challenges, compete effectively and ensure a business thrives.

An image demonstrating 5 people of diverse backgrounds around a table, facing a whiteboard with stickies, brainstorming. — Photo by Jason Goodman on Unsplash

Companies have all manner of approaches to strategy, particularly in these times. Obviously, many businesses will target practical strategic priorities and work through them one by one. If we look at large multinationals, many have recognised that they cannot rely exclusively on their existing leadership to navigate all challenges all at once. Some are engaging external consultants. Others are spinning up teams of subject matter experts. Each is a valid, practical approach.

There are others, however, who are leaning into ways to mobilise their teams and engage a larger proportion of their workforce so that they can not only address the challenges on the horizon now but increase agility and capability into the future. It is this approach that I recommend. They institute a Learning Organisation culture which effectively enables vast swathes of employees to become part of and contribute to delivering on the company strategy.

With this capability, a business is much better equipped to deal with any challenges. They make themselves immune to stagnation, they are agile, employees thrive, the business thrives.

These companies are leaning into substantial academic theory and research and turning towards a holistic approach to talent management. They are taking a Systems Thinking approach and directly aligning their talent management strategy with their business strategy. There are some great examples of companies like Maersk, Microsoft, Zappos and Bain & Company who have been able to produce exceptional business results that deliver better results for customers and very highly as top places to work by aligning their talent strategy with their business growth strategy.

Make no mistake, larger businesses struggle to do this. There are not that many examples of companies who have achieved this. They struggle to deal with the existing structures, bureaucracy and business as usual or they undermine their own efforts by inadvertently undermining their innovative efforts through micromanagement, measuring the wrong things or fear.

Image of a hand open "holding" a futuristic scene in a bubble, with lit up buildings and to the right, text saying Chart the Future. — Future Visioning

The SME Opportunity

While larger enterprises grapple with complexity, smaller businesses possess a unique advantage. Their inherent agility (or ability to become more agile using the right tools) allows them to excel by motivating their teams and embedding a Systems Thinking perspective that connects daily actions directly to strategic goals. To repeat what I stated earlier:

With this capability, a business is much better equipped to deal with any challenges. They make themselves immune to stagnation, they are agile, employees thrive, the business thrives.

They can act like a multinational in ways that allow them to compete through their agility. This can be achieved by introducing a clear, cascading approach that turns vision into value:

Vision: Scan the environment and establish a clear and compelling direction for the company's future.
Clarity: Translate the vision into understandable objectives that resonate with the entire team.
Measurements: Define key metrics to track progress and ensure alignment with strategic goals.
Methodologies: Implement proven frameworks and processes to guide execution and innovation.
Continual Improvement: Foster a culture of learning and adaptation, consistently refining processes.
Lean Efficiency: Focus on optimising operations to eliminate waste and maximise value.
Stakeholder Value: Ultimately, drive sustainable success and create meaningful returns for all stakeholders.

In the coming weeks I will explore practical tools, such as the Three Horizons methodology and even de Bono’s Six Thinking Hats, to begin to address this Systems Thinking Approach to leadership teams while simultaneously creating the culture of success throughout the entire team.

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With almost 25 years of experience in global multinationals building and running customer-centric operations to deliver sustainable bottom-line growth through enhanced customer retention, increased operational efficiency, and strategic revenue optimisation, I offer fresh perspectives for identifying winning strategic objectives and executing effectively on them.