Recapturing the Hunger for Growth in SMEs

barryflack1
Sep 25
5 min read

Updated: Nov 13

The Hunger Gets Lost

Naturally, after a while, most SME leaders I meet have subconsciously shifted from growth mode to stability mode. Sadly, many have dropped to survival mode. But honestly? That shift makes complete sense at the time.

Let me be clear: I have nothing but respect for those operating over the last few decades in an environment that’s been one bin fire after another. Let’s remind ourselves one more time:

Post-2008 Financial Crisis: The aftermath of the financial crisis left many businesses struggling to regain their footing.
Post-Brexit Madness: The uncertainty surrounding Brexit created additional challenges for SMEs.
Post-COVID Flexibility: The pandemic forced businesses to adapt quickly, often at the expense of long-term planning.
European War and US Tariffs: Ongoing geopolitical tensions have added layers of complexity to the market.

Survival required resilience, not recklessness. It’s no surprise there’s been little headspace for investment and growth to flourish.

The Talent Squeeze

With emerging skills and resourcing mixes, exponential technology, and demographic change, good people have become harder to find. They are more difficult to manage, and with the end of the old employment deal, they are harder to keep.

Regulatory Complexity

Ever-shifting compliance demands took priority. With the rollout of the seismic Employment Relations Bill for 26/27, there are no signs of slowing down. Has the shift to employee flexibility impacted SME leaders? Probably.

Customer Expectations

Reliability became the edge, not experimentation. Businesses doubled down on their cash cows and avoided anything major beyond the obvious new digital footprint.

In conclusion, the problem isn't that SME leaders lost their hunger. It's that the environment rewarded stability over agility for so long that the muscle memory of growth became dormant.

Why This Matters More Than Ever

Now, I’d argue that the environment is shifting again. Stability-first thinking won’t shield our SMEs because AI isn't just another tool; it's a new business dynamic. It acts as a catalyst for organising around the customer differently. Therefore, in this context, being passive is a luxury SMEs can no longer afford.

Despite a continued tough economic environment (and the answer won’t be some bounce back to a more predictable set of conditions), this is a time to be active, not passive. Particularly when it comes to how AI can help SMEs become more organised, adaptive, and equipped to grow in the face of market volatility.

Sitting back and waiting is effectively choosing decline. But here’s the critical thing: activity alone isn't enough.

"Intentionality is the CEO's job."

The way you organise your business, the trade-offs in culture you prioritise, and the workflows you decide to automate are all leadership decisions—not left to the machine. The market rewards organisations where the CEO is deliberate about where technology amplifies human judgment, how data enhances customer value, and what efficiencies free up creativity rather than suffocating it.

Buying an AI tool or digital platform is not the CEO strategy. Intentionally redesigning your organisation to align people, data, and technology to strategic outcomes is the leadership your people are looking for.

The Cost of Staying Comfortable

I recently worked with a manufacturing SME whose leadership team had already spent 18 months debating whether to implement a basic, off-the-shelf CRM system. While they hesitated, their competitor gained a 40% efficiency advantage through automation.

That's what lost hunger and a lack of intentionality look like: analysis paralysis dressed up as prudence.

Meanwhile, SMEs with intentional leadership are actively leveraging AI in customer service, predictive insights, and operational automation. They are widening the capability gap every day and forecasting what this is doing to the physics of the organisation.

Balancing Stability and Agility Through Intentional Design

The leaders thriving today aren’t abandoning stability. They’re using it as a springboard. But that springboard only works if the CEO is intentional about:

What operational flexibility is needed for growth.
Which customer outcomes matter most, and why.
What trade-offs employees are willing to make in exchange for smarter tools.

These are not accidental design outcomes of technology adoption. They are decisions made at the centre (not the top) to be executed at the periphery (customer-facing).

What Does Leading with Intentionality Look Like?

So, if the default is handing accountability to the CTO to source some tech, what does this intentional approach look like instead?

(1) Start Small but Think Systemically

As a leadership exercise, identify and automate one repetitive process. But know why that process matters to the customer or the employee, or both. Decide deliberately:

Which tasks must stay human because they need creativity, empathy, or judgement?
Which tasks are predictable patterns that technology can and should handle?

This isn’t just about cutting costs. It’s about freeing your people up to focus on value-adding work that drives growth and innovation.

(2) The Pilot Partnership: Test with a Purpose

From the above, pick one AI tool or technology and run a 30-day pilot on that single process, but with clear leadership intent:

What specific problem are you trying to solve?
How will you measure success? (Time saved, errors reduced, customer satisfaction improved, etc.)
What should your team do with the time or capacity they gain back to create more value for the business, customer, or culture?

Remember, this is not an IT project. This is a leadership exercise in transforming how work gets done. Your role now is to ensure the pilot has direction and that lessons (with data you can trust) learned inform broader strategy—not left as just an improved transaction.

(3) The Stable Innovation Budget: Invest in Agility Within a ‘Stable’ Framework

Allocate 2-3% of your annual revenue specifically for AI, technology trials, and innovation. But don’t scatter it across random tools, and don’t make it just a CTO play. Instead, invest with intent in technologies that:

Strengthen your strategic priorities.
Improve customer experience in ways that matter.
Make your business more adaptive and resilient.

Think of this budget not as an experiment fund, but as your infrastructure for transformation. Ensure technology accelerates your growth ambitions, not just transactions.

(4) Create Learning Loops: Enhance People, Don’t Replace Them

When you introduce AI, the goal isn’t to cut people out. It should instead be to amplify our human strengths. That only happens when you design the process deliberately to keep people in the loop. Doing that means intentionally:

Involving your wider team: Get their insights on how AI can make their work smarter, not just faster or more efficient.
Listening to customers: Understand where human interaction adds irreplaceable value in their experience.
Building feedback loops as a muscle: Ensure that as the AI learns, your people are also learning. Adapt their judgement, skills, and creativity alongside the technology.

This is intentional transformation, not passive automation. You’re not just deploying tools; you’re actively designing a smarter, more capable organisation, with your people and customers at the centre.

Final Thoughts

SMEs that will thrive in the AI era won’t get there by accident or by simply buying the latest platform from the smoothest demo. They’ll get there because their CEOs made clear, intentional choices about how to organise for growth.

vision.