Change is an inevitable part of running a business, and for small to medium-sized businesses/enterprises (SMEs), change can present both challenge and opportunity. Whether it’s adopting new technology, restructuring your team, or responding to shifts in the market, effectively managing change is vital for longer-term success.
And for smaller businesses, the stakes can often be even higher. With limited resources, close personal relationships and a need to “keep the wheels turning,” SME owners and managers can find themselves having to juggle the day-to-day while also navigating the unknown.
With many years experience working in HR, both in corporate and SME environments, we’ve seen instances of change managed both spectacularly poorly (unclear purpose/objectives, poor communication, inadequate resourcing, failed execution resulting in huge uncertainty, dissatisfaction and limited results), and spectacularly successfully (clear alignment with vision/strategy, effective communication, deliberate efforts to achieve “buy in” resulting in significant positive impact).
In this article, we explore the typical sources of change, some of the challenges that are perhaps unique to SMEs, and a few practical tips to help ensure you’re better-positioned to make future changes work for you and your business.
Common Sources of Change in Small Business
Change can be come about for a whole range of reasons. Some of the most common include:
- Operational Adjustments: Process improvements, new systems, or workflow changes to boost efficiency or quality.
- Technological Upgrades: Implementing new software, automation tools, or digital platforms to stay competitive.
- Structural Changes: Team restructuring, role changes, or shifts in reporting lines, sometimes driven by growth, downsizing, or succession planning.
- Market and Regulatory Shifts: Changes in customer preferences, competitive pressures, or updates to legislation and compliance requirements.
- Cultural Initiatives: Efforts to build a more constructive workplace culture, improve engagement, or clarify values and expectations.
Each of these can impact your people, your processes, and ultimately, your bottom line.
The Unique Challenges of Managing Change in SMEs
While large organisations often have dedicated resources for managing change, those of us in SMEs face a different reality:
- Limited Time and Resources: As owners and managers in SMEs, we are often “wearing many hats,” making it hard to dedicate focused time to effectively plan, communicate and execute change.
- Close-Knit Teams: Personal relationships can both help and hinder change. Loyalty is high, but resistance or anxiety can be more direct, personal and impactful in an SME environment.
- Financial Constraints: There may be less room to “experiment” or absorb mistakes if change initiatives don’t go as planned.
- Family Dynamics: In family-owned businesses, change can be complicated by family connections, generational differences, varying beliefs and goals, and longstanding habits.
Research from McKinsey & Company highlights that around 70% of change initiatives fail to achieve their intended outcomes, often due to a lack of engagement and insufficient leadership support (McKinsey, 2015). For SMEs, these risks can be magnified without a clear, practical approach.
Top Tips for Successfully Managing Change
So, what can you do to optimise your chances of success? Here are our top tips, based on our years of experience:
1. Clarify the “Why” and the “What”
Change is easier to embrace when everyone understands the reasons behind it, so be sure to clearly articulate the purpose and desired outcomes. As Simon Sinek famously said, “People don’t buy what you do; they buy why you do it.” The same goes for internal change—clarity of purpose builds buy-in. (Oh, and we can’t forget the Clear Vision, Values and Strategy component of the Success Through People model: seek to align your change effort with the vision, values and/or strategy of the business)
2. Engage Your Team Early
Involve relevant people in your team in the change process from the outset. Ask for input, listen to concerns, and encourage open dialogue. Research by Prosci (2020) shows that employee involvement significantly increases the likelihood of successful change by fostering ownership and reducing resistance. Just by inviting your people into the conversation, you’re demonstrating that you value them as a part of your business.
3. Communicate Consistently and Transparently
Regular, honest communication is key. Share updates, acknowledge uncertainties, and celebrate small wins along the way. As per Kotter’s 8-Step Change Model, “communicating the vision” is critical for aligning and energising your team.
4. Set Clear Expectations and Provide Support
Define what’s changing, what’s expected of each person, and how success will be measured. Provide information, training, resources, and encouragement to help your team adapt. As highlighted in the Success Through People Model, Equipping Others with the right tools and information is essential.
5. Address Resistance with Empathy
Change can be unsettling. Take the time to understand concerns and address them respectfully. Sometimes, resistance is simply a sign that people care about the business, so use it as an opportunity for deeper engagement.
6. Monitor Progress and Be Willing to Adjust
Track your progress, gather feedback, and be prepared to course-correct. Change is rarely a straight line. As management expert Peter Drucker put it, “What gets measured gets managed.”
7. Celebrate Successes—Big and Small
Recognise effort and achievement, even if milestones are modest. This builds momentum and reinforces a positive, constructive culture.
Final Thoughts
Managing change is part art, part science. For SME owners and managers, it’s about blending clear intent and practical planning with a genuine commitment to the long-term success of your business, with the capability and support of your team (“Success Through People” if you will!). Remember, successful change isn’t just about processes or policies; it’s about building trust, fostering engagement, and creating an environment in which your team can thrive.
If you’d like to explore how the Success Through People Model can support your change initiatives, feel free to get in touch.
References:
- McKinsey & Company (2015). The Inconvenient Truth About Change Management.
- Prosci (2020). Best Practices in Change Management.
- Kotter, J.P. (1996). Leading Change.