The role of SMEs in promoting responsible business

Heart of the City exists to make it easy for ambition-right but time-poor small business leaders to set up their responsible business programmes from scratch. We’re the only responsible business network working with small to medium sized businesses (SMEs) in this way, and our nearly 20 years’ experience working with this audience gives us a unique perspective on both the huge potential and challenges that these businesses have in approaching responsible business.

But first, why are we focusing on SMEs? Some of you may not know this, but SMEs comprise:

  • 99% of the UK private sector
  • 60% of all private sector employment in the UK
  • Over half of all private sector turnover

Given their large footprint and reach, we believe that SMEs have a significant role to play in creating a truly inclusive and sustainable economy. Simply put, that’s why we at Heart of the City work hard to support these businesses to do their part.

In our experience, we’ve seen that that they have a few distinct advantages compared to larger businesses when it comes to developing and sustaining responsible business activities. Namely, SMEs benefit from:

  • Flexibility: because SMEs are smaller, they are more nimble. They’re less bureaucratic and operate in more iterative cycles, allowing them to trial ideas fast and innovate quickly. This means they can more easily set up a new volunteering programme, switch to greener, more ethical suppliers or offer work experience to disadvantaged groups.
  • Authenticity: SMEs operate in closer proximity to their stakeholders, including their clients, community and employees. They can use this to inform sustainable innovation in their business products or services, develop strategic community partnerships and foster a positive workplace culture that genuinely aligns with their employees’ and customers’ values.
  • Exposure: due to their leaner size, employees have more exposure to other elements of the business. This means they may be more in tune with the overall purpose and challenges of the business, which is important in identifying risks, goal setting and embedding responsible business into the entire organisation.

In addition to recognising SMEs’ distinct advantages, at Heart of the City we pay attention to their business challenges and motivations for taking up responsible business activities. This not only informs our programme design, but it also raises awareness about the business drivers which can be leveraged to promote responsible business activities on a wider scale.

In 2019, the top three business motivators for taking part in our programme identified by our members were:

  1. To do the right thing
  2. To build a network of likeminded peers
  3. To improve their brand and reputation

We take note of these key drivers and tailor our advice accordingly. For instance, if improving brand and reputation is a key motivation to one of our members, we help them with promoting and communicating about their successes. If it’s building a network of likeminded peers, we create opportunities for our members collaborate.

Lastly, we’ve also gained knowledge around SMEs’ approach to responsible business and adapt our support to work best for these smaller businesses:

  1. SMEs prefer to keep their approach simple: for businesses that are time-poor, like many SMEs, an uncomplicated and straightforward approach to responsible business activities that is connected to their business needs is key to enabling and embedding behaviour change. We encourage our businesses to start with small wins, build momentum and become more ambitious from there.
  2. Perhaps due to a lack of hierarchy, a more collaborative approach to responsible business is preferred, where employees and other key stakeholders are included throughout the process. We share tools and tips, like how to survey your employees or form a committee, so that our members can meaningfully engage these audiences.
  3. When resource is scarce, as is often the case in SMEs, simply ‘doing something’ is viewed as more important than measuring it. While we agree that an active, informal and intuitive approach is better than having no positive impact at all, we do encourage our members to measure their impact. We believe this helps provide a baseline to recognise improvements and build the business case for more resource allocation to scale their positive impact, and we offer support to help simplify the impact measurement process.

So, if you’re reading this and you’re a small business owner looking to align social and economic value with your commercial needs, or if you know somebody who is, get in touch with us – we’ll get you on your way!

The Heart of the City 2020 foundation programme is open for applications now – find out more here and apply by 29 November

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Heart of the City London Limited, company number 5973126. Registered charity number 1117212.
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