Leadership, as a key management concept, can be defined in several ways but it is essentially understood as an individual's capacity to influence and motivate a group of people. An important aspect related with providing leadership is innovation. Steve Jobs, founder of Apple and among the most famous entrepreneurs, claimed that "innovation distinguishes a leader from a follower."

It is essential for small and medium-sized enterprises (SMEs) to understand how to develop a good leader, especially when the latter is the owner. Precisely, the big difference with respect to peers in the big league is that in most cases it is the owner himself who spearheads the changes.

Being the owner or manager of a company does not turn you into a leader. “A manager relies on control while a leader inspires trust,” indicates Warren Bennis, one of the so-called leadership gurus in the United States. Most of the literature focuses on "the human factor" as being the main influential aspect, whereby those leading the company should become its main competitive advantage.

SMEs are more static by nature and are not accustomed to big changes. This is why, at first, it is important for leaders to work closely with their teams and ask their employees how they believe things should be done. In order to develop more effective leadership, one has to try to offer spaces where people can be creative, give them back their responsibilities and have them solve their own problems so that they can become aware of what it is like to take the reins of a project or a team.

What does research reveal?

A global survey conducted by the consulting firm McKinsey & Company found that among the skills required for companies to be successful, leaders should promote participatory decision-making since they do not always have the information to make the decisions. Involving others in the decision-making process allows executives to benefit from individual talents.

A University of Illinois study supports the idea that leaders are not necessarily born but made. They proved it by offering leadership courses to different students for several weeks and found that their skills had notably increased. Accordingly, in addition to the personal skills that a business owner needs to lead a company, he also has to be aware that if the company has a real competitive advantage he has to make it stand out in order to attract consumers in the market.

Currently, in order to compete with large companies, SME leaders are forced to come up with new strategies to improve customer service, marketing innovation, quality of response, team work, speed of action and ultimately build closer social media relations.

Today it is essential to be very fast, flexible, inventive, cheap and even perfect. A leader in such a setting has to primarily focus on improving his relationship with collaborators, the market and his environment if he wishes to achieve real commitment on their part in order to last in the market and over time as a company.

Agility is critical to companies today. Effective leaders develop a vision of the future, they create and sell the strategy and persuade others in the organization on how to work. It is not all about control. A leader is capable of managing information and knowledge more effectively by influencing employees on the basis of achieving production and quality goals.

Although current techniques for understanding organizational culture and leadership are growing rapidly, SMEs still have a long way to go. Typically, they lack training and still tend to confuse leadership with the notion of authority. This is why developing leadership in these companies translates into an opportunity for strengthening and growth.