What can the Public Sector learn from Small Businesses?


Have you ever wondered what makes some small businesses really successful and achieve stellar levels of growth? 

It’s estimated that only 4% of businesses ever hit the £1m mark in the UK and only a fraction of those go on to bust the £5m mark.  So there has to be something about those 4% of businesses that makes them succeed ahead of the competition. In my experience this is based on more than simply a good idea and lots of hard work.   During the ‘start-up’ phase most businesses are focussed on survival, but what initially gets them off the ground and through the first year isn’t enough to drive the type of growth that elevates a business to the next level and beyond.  You might be tempted into thinking that these businesses are probably founded by people that have an exceptional skill, outstanding academic ability or simply had the capital available to invest and stimulate growth; however,  it surprised me to find out that many of our most well-known successful entrepreneurs in the UK didn’t have a university education or start with anything other than an eye for an opportunity and the drive and determination to succeed:  Richard Branson, Alan Sugar and Karren Brady to name but a few.

What sets these successful entrepreneurs and their businesses apart? There is obviously some level of calculated risk taking, a wrong decision could be the end of a small business but the fear of ‘what if’ could also be that nail in the coffin – so the stakes can be extremely high.  I read this great article a few months ago in Forbes, written by Celinne Da Costa which was actually a travel article but titled ‘3 Ways taking risks makes you better’; it was the title that initially hooked me in.  Anyway, the author went on to impart something that one of her mentors had told her and this has stuck in my mind – ‘there are reckless risks, and then there are enlightened risks’.  She went on to explain that enlightened risks are thoughtful, calculated and inspired by a larger vision or dream and the risks determine the actions we take to get closer to where we want to be.  Easier said than done but I could really relate to this and recognise that really great small businesses (and leaders I’ve worked with) are passionate about a vision and how they will get there, and this is partly what drives rapid growth; however, with rapid growth comes a corresponding increase in complexity and this is where things often get de-railed. Managing complexity is difficult, particularly if you also want to remain agile and creative as this complexity naturally leads to structures, process and governance that can be at odds with the ethos that made the business great in the first place (I’m sure many of us can also relate to this).  For the start-up breaking through the £1m milestone requires little compromise on the vision; it does, however, require plenty of Risk Leadership rather than Risk Management i.e.  inspire those around you to be creative, solve problems but above all keep moving the business forwards – Fail Fast but Learn Faster to use the Lean start-up mantra.

You may be thinking I’ve wandered off topic as I started this blog with a question – Can the Public Sector learn from small businesses?

Well I guess based on my experience of working in both the public sector and in commercial businesses for the last 30+ years and seeing the increasing pace of change that’s required, in my mind the answer is a resounding yes!! The public sector today seems to be constantly challenged to do more with less, work collaboratively with partners and deliver on the increasing expectations of tax payers.  This, alongside the increased need to adopt ‘digital technologies’ and take staff along on the journey is perhaps what leads to levels of complexity that even the best can struggle with?   I often see decision making and creativity suffer in the organisations I work with and I sympathise – maybe looking at some of the attributes of growing small businesses, especially thinking about how to exploit those ‘enlightened risks’ and inspiring creativity amongst people that are passionate about the vision just might unlock some of that ‘Entrepreneurial’ potential?

Founded in 2015, Caja facilitates innovation and change within public and private sector organisations by bringing together experts (external and internal) and senior leaders to tackle complex issues that requires innovative thinking.  The business has been built around the experience and passion of our directors who all have previously held senior roles in large commercial and public-sector organisations.  Our ‘Entrepreneurial Framework’ has been developed to help organisations and leaders tap into a growth mind-set.

If you want to learn more then get in touch.