12 challenges to business transformation for SMEs and how to overcome them

Feb 9, 2023

  • Business experts share how to grow in turbulent times
  • Increase in SMEs searching for “how to grow business” in 2023

With rising costs and bills continuing to pose concerns for businesses in 2023, undergoing a business transformation might seem out of reach for SMEs across the UK. 

Many businesses will be bracing for little to no growth this year. However, with the search term “how to grow business”² on the rise, it’s clear that organisations are still eager to develop and excel in 2023. 

With this in mind, experts from Huddersfield Business School’s Help to Grow programme have broken down the 12 challenges businesses are most likely to face when working towards a growth strategy and how to overcome them:  

  • Innovation and keeping up with trends 

Innovation in a business is vital to establishing a productive and economically viable organisation. However, challenges in generating innovation could include impatient leadership, fear of change, lack of ownership, inadequate benchmarking, and no innovation ecosystem. 

Experts from Huddersfield’s Help to Grow course suggest that enablement is the solution to this challenge. Enablement means business leaders need to be willing to invest in resources and time, encouraging a bottom-up culture where ideas are free to be generated, tested and brought forward.  

  • Developing a clear strategy 

Executing a clear strategy can be complex, and common challenges can include poor goal setting, lack of alignment, inability to track progress, and no measurements or leading indicators. 

The first step of developing a strategy is straightforward, including identifying new goals. With a clear picture of what a business is trying to attain, it can be easier to establish a plan for getting there.

  • Digital adoption 

Knowing what’s right for your business when it comes to digital enhancements can be challenging to navigate. Challenges for this can come from a lack of leadership, organisational vision, actual software implementation, budget considerations, digital skills gap of some employees, shortage of technological resources, risk-averse organisation culture, and too much reliance on legacy systems.

Taking a step back and considering what digital enhancements your business will benefit from is key. Huddersfield Business School recommends that developing a change management strategy that explains the purpose of change and what role employees will play in the transition will prepare them for a digital transformation journey. 

  • Winning new markets

As a business grows and entering new markets becomes a priority, SMEs should be prepared to come up against new competitors. Following this, organisations should be equipped to complete regular competitive analyses to ensure the strengths and weaknesses of new competitors are being identified. 

  • Knowing your vision, mission, and values 

If you’re hoping to transform your business in 2023, understanding your vision, mission and values will help drive growth. Business leaders of SMEs might be put off developing these factors because they feel pressured to come up with something groundbreaking. However, businesses can be reassured that visions, missions, and values only have to align with the company’s current position and don’t have to be so ambitious and out of reach.    

  • Building a brand 

Knowing your vision, mission, and values also matters because it can determine how challenging it is to build a brand. A brand vision needs to differentiate itself, resonate with customers, and inspire employees, and brand building should start internally to ensure harmony between employees and the brand. 

Successfully building a brand includes defining your brand, differentiating and positioning your brand, establishing brand personality, personalising branding, and identifying your target audience. 

  • Organisational design 

Organisational design is a process for shaping the way organisations are structured and run. If you’re an existing business looking to redesign and there’s flaws in the design, an organisation can suffer serious problems such as ineffective problem solving, wasted time, lack of coordination, inconsistent quality of work, low morale leading to high staff turnover, missing targets and poor performance. 

The solution to this problem is to be adaptable and agile. This means being flexible, making fast decisions, and getting used to adjusting business plans in line with growth. 

  • Employee engagement and leading change 

As a business grows, leaders will have to ensure they’re keeping employees engaged. However, this can be difficult if there is a lack of support from leadership, lack of recognition, poor work-life balance, and lack of direction. The solution to this is taking the time to understand what matters to employees and investing in employee wellbeing and progression. 

  • High-performance workplaces 

Barriers to a successful high-performance workplace can include a lack of trust, relationship and leadership problems, and poorly defined core values. The answer to a high-performance workplace lies within how a team is nurtured and facilitated and the continuous support and guidance they’re given. If these requirements are met, team members will begin to exceed expectations and deliver intended goals.  

  • Efficient operations 

Problems driving inefficiency in your operations can include a lack of standardisation, unclear distribution of responsibilities and tasks, and poorly defined decision rights. To combat these issues, business leaders should focus on a people-first approach, which actively creates a desirable work environment that considers and fulfils the needs of employees. Ultimately, this will boost engagement, retention, productivity and creativity, which will be instrumental to business transformation. 

  • Finance and financial management 

Regarding finances, challenges for SMEs looking to expand and grow in this area could include limited or inconsistent cash flow, not outlining a budget, and not preparing for unforeseen expenses, among other factors. One way to resolve financial issues, or avoid them altogether, is by reviewing, researching, and revamping your business plan. 

  • Implementing growth plans  

If companies have big ambitions in the pipeline, businesses should be prepared to face some resistance and transformational fatigue. However, business leaders can achieve their goals and execute a growth strategy if they have anticipated what will be required and articulated this in a coherent and achievable plan. 

By considering the above challenges, businesses seeking to transform in 2023 will be on the right track to do this successfully. 

Nicola Stenberg, Director of Executive Education at Huddersfield Business School, comments: “Despite the economic turmoil of the last few years, it’s clear businesses are eager to hit significant growth targets this year, which is exciting to hear. Transforming a business comes with many challenges, whether you’re a small or large business. However, for local organisations with little experience in business development, implementing a new growth strategy can be particularly overwhelming. 

“When a business is looking to transform this, it’s essential to seek support from other experts and professionals. If businesses are committed to realising their ambitions, investing in guidance should be a top priority.” 

For more information on the Huddersfield Business Help to Grow programme, and how it can help alleviate the growth pains mentioned, please visit: https://blogs.hud.ac.uk/hbsblog/business-transformation/ 

Council shares more detailed plans for Huddersfield Market

17 July 2024   Kirklees Council have shared brand new visuals, and more detail, on the planned improvements to Huddersfield Market. Once completed, Huddersfield Market will provide an improved traditional market, a better food and beverage offering to complement the...

read more


On Friday 28th June 2024, over 150 gathered for Eaton Smith’s Business of the Year Awards 2024 at the John Smith’s Stadium. The 12 monthly winners from the 2023/24 series of the Business of the Month Awards were all in contention for the Award which celebrates the...

read more

Our Patrons