How to sustain SMEs productivity during a crisis

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By Dr Margarita Nyfoudi
Department of Management, University of Birmingham

Popular belief has it that Small and Medium-sized Enterprises (SMEs) are a close-knit community, in which the members go over and above their work duties to help their employer.

Yet, the findings of our recent study revealed that during a crisis employees are less likely to go the extra mile unless they work within an environment that encourages information sharing.

Why are employees important for SMEs?
Most SMEs lack the resources of larger organisations and hence, they often depend on employees’ flexibility to deal with a plethora of different challenges. In times of crisis, employees’ discretionary effort is even more instrumental as SMEs fight for their survival.

Yet, most past research on SMEs’ crisis management has neglected employees. It is often taken for granted that they will continue to exert the same effort as before the crisis.

What does change during a crisis?
During an economic macro-turbulence, such as the Great Recession or the current one instigated by the COVID-19 pandemic, SMEs in survival mode may deploy harsh labour measures that lead to what we call adverse working conditions. Employees’ job insecurity increases, they have to manage greater workloads (due to staff downsizing) and often deal with negative workplace attitudes.

Against this backdrop, discretionary effort pertains a certain risk: those employees who may go over and beyond their prescribed duties may disadvantage themselves in comparison to their colleagues. For example, they may spread themselves too thin or focus on tasks that although benefit the business are not discussed in their performance review.

Of course, not all SMEs and not all teams and departments with an SME are equally exposed to macro-turbulence. Indeed, our research at The University of Birmingham shows that the more adverse the working conditions are, the less likely employees to go the extra mile.

Is there a remedy to employees’ backlash?
We examined the role of information sharing, as a way to decrease employees’ perceived risk of discretionary effort.

Our research found that in SME teams, in which business-related information flowed generously among their members, the intensity of the crisis born through the deterioration of the working conditions did not significantly sway employees’ discretionary effort.

In other words, at times of resource scarcity and crisis, information sharing within one’s immediate team appears as a valuable resource. Teams with high levels of information sharing sustain employees’ discretionary effort despite any external turbulence.

What could SMEs do?
Information sharing is not easily prescribed to individuals. Requesting employees to discuss more with each other may not be effective – especially during a crisis. In contrast, an SME could facilitate such employee behaviour by:

  • Role modelling
    Employees tend to model their manager’s and/or business leader’s behaviour. If managers and/or the leader share business knowledge with their teams, employees are more likely to value and engage with such behaviour.
  • Mentoring managers and employees
    An effective way to pass information without appearing too intervening. The mentor may be the business leader, a manager or even a colleague, who has come to appreciate the importance of sharing business information with fellow team members.
  • Initiating informal “sharing” team sessions
    Providing time and space for team members to come together facilitates informal and impromptu sharing. These sessions need not be more than 20-30 minutes long. What’s important is to make them a safe space to share, develop trust and a common purpose.

If you would like to find out more ways to promote team information sharing, you may attend our first Breakfast Briefing Webinar on 30 June 2020. Discover what the new virtual “normal” means for businesses, teamwork and leadership. Register here:

For more information on the study: Nyfoudi, M., Theodorakopoulos, N., Psychogios, A., & Dysvik, A. (2020). Tell it like it is in SME teams: Adverse working conditions, citizenship behaviour and the role of team information sharing in a turbulent economy. Economic and Industrial Democracy, 0143831X2092554.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.

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