Entrepreneurs don’t trust big corporates? How can we change that?

Banks and other big organisations struggled to build relationships with SMEs before the credit crunch. After? They became even more transactional.

This matters.

There are 5.2 million SMEs in the UK.

99% businesses are small.

Big companies who want a share of the SME market, need to think like and understand small companies.

We brought together .. Global or UK Heads of SME / Mid Market Channel from leading banks, big 4 firms and global telecoms, with CEOs from fast-growth SMEs to examine the problem and find solutions.

This is what we learnt…

Public and corporate policy decision-makers think SMEs are one big group. They’re not. They are put in a category based on revenue thresholds. That doesn’t work.

“The relationship between banks and SMEs had become transactional.

We made a decision to invest in the infrastructure. We looked to build not the products - but the people.

We’ve recruited 600 relationship managers”. Challenger Bank

“We looked for people who were good listeners and were patient, who were willing to understand the needs of the business.”

Challenger Bank

“Over 5-6 visits they try to understand the business. They don’t assume the product they want when they walk through the door based on their revenue.”

We attribute our growth [700%] to the relationship approach not the products or the price”.

Challenger Bank

And it works ...

“We recently acquired a business and interviewed a few banks. I was shocked at how they came in – they were slagging each other off.

One stood out [Challenger Bank]. They came at it from a different angle. They weren’t interested in where we were now. They were interested in where are you going? What’s our next move?” SME CEO

“All banks need to be better at understanding at the outset ‘How do you want to be served? What does a good relationship looks like?’ and then frame everything from there”.

Challenger Bank

“My question for all my people is ‘What are you doing to help small businesses increase revenue”’

That’s the heart of growing a SME – not what it saves or other hygiene factors”

Global telecom

From the mouths of small business owners…

“We have fingers in lots of pies. We’ll miss the boat if we don’t move fast”

SME CEO

“We LOVE to work with companies who are agile, fast, decisive.

We want to deal with the people who are making the decisions.

That doesn’t change whether they are big or small”

SME CEO

“I hate dealing with companies who are trying to sell a product.

Here’s what I don’t understand about big corporates …. The first thing I would do with MY client is to actually understand their business!”

SME CEO

“The best relationships are when the advisors are solely looking at things through my eyes”.

SME CEO

“Our lawyer is sensational. I can talk to him about anything day or night. He thinks like an entrepreneur. I can run an idea by him. Nothing is ever too much trouble.

He genuinely cares about our business and how they can help.

Everything is about the long term, not about the now”.

SME CEO

The thing is, most corporates KNOW…

They need to focus on needs not products. It’s all about relationships. They’ve made progress but need to do more.

So why don’t SMEs feel any more like trusting their money with big corporates?

Could it be…

“The problem is, our most talented people don’t dream of a career in SME sales”

How we emotionally reward our people…?

Global telecom

“How do you define the heroes of the organisation? If you define them as the people who win the BIG business accounts then you can’t expect people to get excited about this long term SME play.

We’ve created a separate part of the business where heroism is recognised differently”.

Challenger Bank

“Part of the problem is how people are rewarded. In a more pyramid structure, you get rewarded more by going up the chain and more zeros on the client cheques”

Big Four Accountancy

How we recruit our people?.. “Entrepreneurs on the whole will tend to use right brain thinking. Corporate employees use left brain thinking. That’s the mismatch”

Global Consultancy

Entrepreneurs are emotionally attached to their business. In corporates there is no emotional attachment, just an overarching risk profile – the risk to me/my career”

Global Consultancy

How we develop our people?.. “The sad thing is that our graduates come in as energetic passionate intelligent individuals and then we create, four years later, an android type person who stops talking to people.

There is something about the structure which stifles those energetic people.”

Big Four Accountancy

How we encourage our people to think?.. “Good relationships challenge my thinking.

You’re never going to get anywhere if you don’t challenge your client”

SME CEO

How we support our people to behave?..

“Big companies focus on DOING skills – functional stuff. How do you do a loan? How do you do the fact sheet? What comes out a lot from this conversation is the BEING skills. Spending time understanding. We’ve somehow de-emphasised this”.

Big Four Accountancy

The cultures we create?..

“Whether you’re a £5bn relationship manager or a window cleaner, it’s all about the passion for your job”

SME CEO

“It’s all about TRUST. Yet we don’t understand and encourage this.” Global Consultancy

Trust is a formula:

competence x sincerity = trust (i.e. Do I like them?)

Left brain thinkers look for competence

first and THEN they’ll be interested

in sincerity

Right brain thinkers look for sincerity first and competence comes LATER (or is a given)

“We don’t address this culturally so our people can’t engage”

Global Consultancy

SMEs crave: UNDERSTANDING INTEREST CHALLENGE FLEXIBILITY DECISIVENESS PASSION TRUST

So, what’s the answer?

Change how we structure:

Smaller portfolio sizes “..Or they’ll never have enough time to spend with businesses” “There’s no point in saying ‘it’s about REALLY understanding their business’ then hitting them with massive sales targets..”

Change how we control:

Put decision making in the hands of the people who know the clients best – so they can work FAST Entrepreneurs want to work with the people who make the decision. Provide a framework in which flexibility and speed is possible for relationship managers – within a framework that is safe for the corporate.

Change how we recruit:

Very different relationship manager / sales professional profile Open, interested, passionate, brave, right-brain requires a new recruitment strategy. This takes time, perhaps five years?

Change how we reward:

Where heroism is recognised differently Where relationship and not immediate return is recognised

Change how we focus:

On growing the client not selling a transaction–the source of future value to the organisation. On our strengths – offer SMEs access to our networks and knowledge not our product.

Change how we lead:

“If you want people to care about their business clients personally, care about them personally. Have them round for dinner. Spend time with them”

Change who we ARE:

Given purpose and autonomy adults at work will use their talent to create value So let’s let them go ahead and do that…

“The world is changing. Millennials want to be part of the new ecosystem, the new economy, the fast cool entrepreneurial businesses.

The groundswell is coming...

but it hasn’t reached the top of large organisations yet”.

think. entrepreneur

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