Making Strategy a Habit: A Promising Light-Touch Approach to Improving SME Productivity

The UK faces a tough productivity challenge. From 2010 to 2022, annual average growth in UK GDP per hour was just 0.5 percent, representing a dramatic slowdown from previous decades. While productivity slowdown has been prevalent across most advanced economies, the UK has performed particularly poorly compared to our nearest economic comparators, including France, Germany, and the United States.

Small and medium-sized enterprises (SMEs) are crucial to solving this puzzle. They account for approximately 60% of UK employment and half of turnover, making them vital economic engines. Yet many previous interventions aimed at boosting SME productivity have fallen short of expectations, often due to low engagement.

The Challenge: Spending time ‘in’ rather than ‘on’ the business

Research has found that businesses with clear strategic direction and regular cross-functional strategic collaboration outperform those without such practices. Strategic thinking and planning helps SME leaders and their management teams identify growth opportunities, allocate resources efficiently, adapt to market changes, and make decisions that enhance long-term productivity. However, qualitative research with SME leaders has found that they don’t have time or don’t prioritise spending time on strategy – they spend time working ‘in’ their business (reacting to immediate operational and delivery issues) rather than ‘on’ their business strategy.

Most existing business support programmes focused on strategy and management skills are time-intensive, requiring weeks of commitment. While these can yield impressive results, recruitment is often challenging, potentially due to the significant time commitment required from already busy SME leaders. This creates a paradox: the business leaders who might benefit most from strategic training are often those who perceive they have the least time to participate in traditional programmes.

A New Approach: The Strategy Bootcamp

To address these barriers, The Productivity Institute, Be the Business, and the Behavioural Insights Team collaborated on a pilot study testing a light-touch intervention designed to build a habit of strategic thinking and planning among SME leaders. The intervention – named “The Strategy Bootcamp” – consisted of a two-week course delivered via mobile app, with each lesson designed to take just 10-15 minutes to complete. The aim was to present engaging strategic planning exercises that could be completed in small chunks, allowing them to be more easily integrated into a busy business leader’s day. The course covered core strategy topics including the Business Model Canvas, Porter’s 5 Forces, setting targets, and developing KPIs.

Promising Results

The pilot demonstrated evidence of promise in several key areas:

• High completion rates: Almost 80% of participants who started the course finished all modules, with an average completion time of just under two hours.
• Strong satisfaction: More than 80% of participants reported being satisfied with the course and said it was worth their time.
• Behaviour change intentions: The pilot saw substantial increases in the share of participants who intended to hold strategy review meetings and spend at least one hour per week on strategy; while we don’t know how many participants actually went on to implement these, we see it as an indication that the training likely motivated them to want to spend time on strategy.

The pilot also provided valuable insights on recruitment strategies:

• The value of trusted partners: Email outreach proved effective when coming from a trusted organisation but much less so when sent as a cold marketing email. In our final cohort which used email to recruit participants, 92 out of 98 sign ups came from Be the Business’s newsletter, despite its list being less than half the size of a purchased email marketing list.
• Role of incentives: The incentives offered to each of the four cohorts recruited for the pilot differed slightly, and produced some paradoxical findings. While participants in early cohorts stated that the incentive was essential to them completing the course, for the final cohort, we found that offering a lottery incentive (a chance to win a £500 Amazon voucher) worked less well at encouraging sign ups than offering no incentive at all.

We think The Strategy Bootcamp pilot is a promising first step in exploring how lighter-touch interventions can potentially unlock disproportionate behaviour change through habit formation. Given that SME leaders cite time constraints as a barrier to strategic thinking and planning, this approach offers a promising middle ground between intensive face-to-face courses and static information websites. As the UK continues to grapple with stagnant productivity growth, innovative approaches like this – that meet SME leaders where they are and offer practical, accessible tools for improvement – deserve further exploration and evaluation.

This blog is based on the report “Developing a Scalable Solution to Improve SME Productivity: A Pilot Study” by Holly Midwinter, Adam Hardy, Louis Shaw, Lauren Leak-Smith, and Eva Kolker, a collaboration between The Productivity Institute, Be the Business, and the Behavioural Insights Team.