Latest from SME People Insights - Issue Two

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For the forward-thinking SME C-Suite | For enlightened HR Professionals | For a growing world of Fractional Executives

A newsletter that appeals to those who simply want to ensure as many SMEs as possible know how to make great workplaces!

First off, feeling very grateful to those 815 people who subscribed from week one, joining a community ?of forward-thinking SME leaders who are shaping the future of work in businesses like yours. Never has it been more important to stay ahead of prevailing changes and adapting to change. We can’t prevent them buffering our businesses, but we can create organisations that can withstand and flourish in the face of any unpredictable change.

?So, let’s dive in and explore what we know is coming at us and what you might consider needs adapting. If you’re struggling with the latter (and lots are) then let’s talk!

We need to start talking about Diversity. Again.

The American backlash against Diversity has begun to ripple into the UK – where our unspoken social divide comes under the spotlight in this article from Margarito Pagano in the Times, writes:

“An obsession with diversity has distorted hiring, leading to tokenistic appointments”.

Now my experience of enlightened CEOs, is they want to do the right thing and can see through Zuckerberg calls for more “masculine energy”, a call to action aimed not to correct past excesses but instead revert to comfortable norms that have served only a select few.

On the one hand, and despite the social media bubble, ‘inclusive practices’ rank highly among today’s employee population, with 39.3% seeing it as valuable for future success in 2028 in the UK. On the other hand, those going full reactionary on the issue of diversity would do well to remember that history has rarely judged kindly those who, when faced with moral choices about human dignity and equality, chose the path of least resistance.

So, as practical insight for a sector without the big business budgets, and striking a balance between stakeholder and commercial priorities:

• Drop the highly politicised, polarised narrative and belief systems. Stick with the data instead.
• Know your business, your people, and the wider community to focus on cost-effective DEI initiatives that directly impact business performance. Diverse talent pipelines, local community outreaches, mentoring and inclusive leadership skills dealing with multigenerational issues. Drop the performative stuff.
• Utilise simple feedback mechanisms rather than expensive point solutions, to help build value-adding interventions. Remember we can move quicker, and be more impactful sooner, than our larger corporate cousins.

As an SME, remember that agility and authenticity are your superpowers when it comes to establishing positively intentional DEI approaches over the big guys.

Avoid over indexing on Employee Engagement.

Despite good intentions, we still face the fact that for many, work still sucks. ?Evidenced again from a large happiness study: out of 40 different activities people engage in throughout their day, work ranks second to last. The only thing that makes us feel worse. Being sick in bed. Not sure we can compete with number 1 on the list - making love, unless we all become Swiss Tony ??

As with everything associated with understanding human nature, the problem is nuanced and complex. People still get happiness from long-term meaning at work, so this suggests to me this is an experience issue. And the good news about that is, you can proactively fix it through a series of small changes, on the principle that where, when, and how people work seems to significantly impact their happiness. But there’s a word of warning about over-indexing. While it’s obvious that nobody wishes to work in a toxic culture, there are risks in a ‘too nice’ version also, with its associated absence of critical conversations, lack of accountability and silos stifling innovation.

The important thing is creating positively intentional interventions that strike the right balance, treat employees as adults and focus on outcomes over performative inputs. ?With that in mind:

• Flexibility on where to work remains a key ask of talent. Make Hybrid work.
• Take intentionality into the office environment. Think about productivity, camaraderie, connection, and ideation.
• As larger businesses trip over themselves on RTO mandates, there’s a clear talent advantage to be had in SMEs as a result.
• Build boundaries in this ‘always on’ working environment.

We live in an era where the new employment deal means we must factor that people want to be seen, heard, and connected. Drive strategies with these principles in mind.

AI just went national

I’m hugely thankful to Martyn Redstone for his digestible summary of the Government’s AI Opportunities Action plan, introduced in January 2025. Aimed at the necessary big bet of harnessing AI for growth and innovation, and one SMEs should keep a close eye in as it offers:

• Access to enhanced AI infrastructure – New supercomputing facilities and Growth Zones to expedite data centre development and allow the sector the facilities to experiment and scale.
• Public Data Resources - - Data to support AI research and innovation, to help train models, develop new products and enhance services, all whilst adhering to data privacy and security standards.
• Participation in skills development initiatives - ?With acceptance of low digital fluency in the sector, this offers government-sponsored training to upskill existing employees as they make the transition.
• AI Growth Zones – Where SMEs can collaborate with entities in these zones.

With this external infrastructure a much-needed boost to the economy, the internal focus should also accelerate, and HR teams and Executive boards should be placing AI into skills attraction strategies from local university programmes, reskilling exercises, or revamped job descriptions. AI won’t be your biggest threat. Competitors utilising AI will be instead. This important Technology is evolving fast and therefore important you don’t fall behind.

Never too late to adapt.

Natural that the beanie hat-wearing hipsters of Shoreditch and beyond take the plaudits for a start-up (and clean slate) ecosystem that is willing to embrace a more forward-looking approach to the evolving workplace agenda. However, I’m as interested in helping the knicker factories of Coventry to embrace and adapt strategies that fit with today’s complexity, and that means appreciating what we can learn and adapt from our Tech brothers and sisters. Take inspiration from great folk like Matt Bradburn, JooBee Yeow or Luke O’Mahoney.

But the biggest takeaway is to know that any company, large or small, can be saved from a flawed organisational model. Period.

In defence of having no idea about changing, we’re up instead against limiting beliefs that suggest people are resistant to change. But we know from science and the evolution of our species from the cave to the stars, that is not true. What people resist is dumb change, or perceived losses (such as status that reflects the current system) that those in the “change circuses” that bedevil our organisations, inflict on us.

?How does this manifest itself?

Where our SMEs, once focused on compliance and it’s ‘good enough HR’ mantra, the application of a principles, rather than rigid structures (no more so than the legally constructed HR handbook) provides for flexibility and adaptability in shaping decision-making behaviours. The rise of open-source material now makes this accessible and should provide SMEs with enough stimulus to adapt accordingly. One of the best of these is Adam Horne’s Openverse site, providing some of the best people-related best practice material on the internet. ??

So how can an SME create a principles approach that aligns teams whilst creating autonomy and fostering a balance between clarity and innovation? Three steps :

1. Define your core principles. (e.g., prioritise customer value, etc)
2. Commit to decentralising (e.g., provide clarity on desired outcomes and trust your teams to decide how to achieve them)
3. Iterate and adapt. Encourage teams to align work with the principles and adjust accordingly. Regularly revisit.

Your legal framework (and soon to be subject to major change with the Employment Rights Bill) continues to be relevant in the background, for compliance, but your differentiator as a business should be focused on flipping to a principles-led, devolved organisational framework.

Some Final Thoughts

The articles. The content. The nervous Executive team at the start of an assignment pointing out the fact that they don’t do everything well, reflect an important message - there’s no such thing as the "perfect" company culture. That issue reflects more on our complicated relationship with perfectionism.

Don’t get me wrong. I don’t work where the culture is toxic, but once I get past the fact that the Executive is authentic, the important thing is to embrace where you are, and not compare with an ideal. Build by constantly flipping the system, with a positive intent to achieve a balance between positive business results and a great team environment.

Listen and reflect the team's actual needs rather than following faddish trends and measure impact through business performance, not cultural ideals. ?Your company culture doesn't need to be perfect – but regardless of the size, ?it remains complex and messy — not easy to codify — but the recipe remains the same - you need to be working on it all the time.

?Until next time.

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Barry

Barry Flack is an award-winning Fractional HR Leader who wants to use this platform to ensure that as many SMEs as possible know how to make great workplaces! Subscribe if you want insights or just interested how these apply to the world of work in SMEs.

Learn more about Barry's services by visiting his website.