carousel mask carousel mask carousel image carousel mask carousel mask

Big and small business: the reality is collaboration not conflict

Big business benefits at the expense of small business.” That’s a dangerous myth. Driving a wedge between small and big business is not helpful to securing the growth we need in our economy over the next five years of this Government. Our economy’s continued revival depends on an approach that gets the best out of companies of every size and recognises they are more united than divided in how to achieve that.

That’s why our organisations, the CBI, representing a cross section of businesses of all types, and the FSB, representing the interests of the self-employed and small businesses, are coming together today (2.7.15) at a Great Business Debate to bust some myths.

The business community is an ecosystem and entirely interdependent. We need to focus less on big v small business, and more on how to manage the journey from small to big. We must remember that every business was small once and many small companies have big ambitions to grow.

“Driving a wedge between small and big business is not helpful.”

And companies don’t simply divide into big or small anyway.

What about our forgotten army of medium-sized businesses, the M’s in SME? They generate almost a quarter of private sector GDP and employ one in every six people. They’re a hot bed of growth, making that transition from small to big, yet were largely ignored in the political manifestos.

There’s already a strong story to tell about how companies of all sizes are working together. Ultimately it’s in the interests of big companies to invest in the skills, innovation and export potential of the smaller ones they depend on. Collaboration is essential to the effectiveness of our supply chains and needs to be encouraged.

Government has a role to play too. It is only through working with business of all sizes that it will be able to deliver jobs and growth, investment in people and technology to improve productivity and competitiveness, higher living standards and more exports. It can also use its own procurement decisions to encourage the growth of dynamic small, medium and large businesses.

“There’s already a strong story to tell about how companies of all sizes are working together.”

The new Government is hitting the legislative ground running, looking to use its Enterprise Bill to reduce regulation and create a business environment that encourages entrepreneurship. These are objectives which firms from sole traders to multi-nationals welcome.

The Government’s also looking to offer solutions to a totemic business-reputation issue where both our organisations are agreed much more needs to be done. The damaging late payment of suppliers. It’s expected to launch a consultation this month into plan’s in the Bill to create a Small Business Conciliation Service which would arbitrate between businesses in disputes over the speed of payments.

We’re waiting to see how that would work in practice but we’re both agreed that late payment is an important drag on business performance and needs to be tackled.

The vast majority of companies have good relationships with their suppliers, but some do take advantage and need to be held to account. To be a serial late payer is short sighted. It damages your own supply chain which, over time, damages you.

“Why should the public trust businesses when some can’t even keep their promises to one another?”

It also harms the wider reputation of business. We all know that public trust in business remains far too low. Only 53 per cent of people surveyed for the CBI by YouGov last year agreed that business makes a positive contribution to society. Why should the public trust businesses when some can’t even keep their promises to one another?

While Government addresses business-to-business contracts, it also needs to put its own house in order. Public bodies, Government included, must pay on time too — in many cases they are at the top of the supply chain. But, in the end, tackling late payment is primarily about securing a change in company behaviour, underpinned by more transparency on payment terms and performance.

Now more than ever the UK’s big and small companies, and those in between, need each other to be successful for business as a whole to prosper. We need to foster healthy, day-in-day-out collaboration while tackling bad practice where it exists. Doing that will drive growth in our economy and enhance the reputation of business in the eyes of the public too.

 

John Cridland – Director General, CBI and Mike Cherry – Policy Director, Federation of Small Businesses (FSB) write for The Great Business Debate

Cridland 800 X 700Mike Cherry close-800 700

 

 

 

 

 

 

This article originally appeared in The Guardian on 2 July 2015.


Leave a Reply

You must be logged in to post a comment.


Close

You are using a trial version of UserPro plugin. If you have purchased the plugin, please enter your purchase code to enable the full version. You can enter your purchase code here.

*
*
Log in via social media