SMEs need to develop business leaders, not just employees—a truth nowhere more evident than in today’s expanding customer service economy. Yet, several obstacles often prevent small and medium enterprises from investing in leadership development. Let’s explore why this happens and how businesses can bridge the gap.
According to Concentrix South Africa, the country’s customer service economy is one of the country’s fastest-growing industries and an important contributor to the economy. But its impact extends beyond job creation. As the sector grows, it is creating new pathways for skills development, leadership, and broader community support – something that can help address the unemployment crisis in South Africa.
“Customer experience and services can be a powerful vehicle for economic participation because they give people an achievable way to enter the workforce and build careers,” says Cathy Kalamaras, Growth Enablement Director at Concentrix South Africa. “But the impact doesn’t stop when someone walks through the workplace door. More and more businesses in this sector are investing in their people and the communities around them, and we’re starting to see a much broader ripple effect.”
As the customer services economy expands, developing local leadership talent becomes equally important. “For South Africa’s services sector to continue creating opportunities at scale, organisations need leaders who understand the local context, the workforce, and the communities they serve,” Kalamaras shares.
“One of the most important contributions is creating access to employment for people who may otherwise struggle to enter the formal job market. Work readiness programmes continue to open doors for first-time workers, while structured development opportunities help turn those first roles into long-term sustainable employment or careers in the customer services sector.
Kalamaras further notes that while job creation is an important starting point, the real opportunity is career creation. “When someone joins an organisation through their first job, it’s important that they can also see a pathway toward professional development and long-term economic mobility.”
Why Does This Matter to SMEs?
Developing leaders in an industry that is showing clear growth is one thing, but how about other industries?
In many small businesses, leadership development is rarely top of mind. When the daily pressure is on to maintain operations and secure new customers, strategic growth often takes a back seat. Several key factors contribute to this challenge:
- Affordability and Cost Constraints: Formal leadership programmes require direct financial investment. Even with mechanisms like the Skills Development Levy, many small businesses view the costs as prohibitive, causing structured training to fall by the wayside.
- Team Size: Small teams typically lack structured in-house mentorship. Furthermore, pulling key personnel away from operations for multi-day training sessions can feel impossible.
- Immediate Operational Firefighting: Founders and managers spend most of their time on urgent tasks that keep day-to-day operations running, leaving little room for long-term capacity building.
- The “Accidental Manager” Assumption: Companies frequently promote high-performing technical specialists based on past individual output, assuming leadership skills will naturally follow without intentional training.
The result is a cadre of underdeveloped managers whose leadership potential remains untapped, leaving them ill-equipped to solve complex operational bottlenecks.
Research from the Chartered Management Institute highlights that 82% of managers enter their roles with zero formal leadership training. This stark reality leaves many professionals tasked with managing employee tasks rather than truly leading people.
Effective leadership development is not merely about sending managers to workshops; it is about placing your business in the hands of accountable, capable leaders who inspire and empower their teams.
According to Inspired Leadership, sustainable capability requires a coherent four-phase progression: self-awareness, human interaction, commercial application, and strategic ownership.
1. Self-Awareness: Emerging leaders must step back from day-to-day tactical execution to focus on personal growth. Rather than measuring success solely by individual output, they ground their leadership in empathy and leverage objective assessments to identify hidden skill gaps.
2. Human Interaction: Leaders move away from micromanagement or conflict avoidance when holding team members accountable. By adopting structured communication frameworks, they deliver clear, compassionate feedback that fosters psychological safety and drives positive performance.
3. Commercial Application: Strong leaders align operational tasks with financial outcomes. By understanding departmental margins, resource trade-offs, and cost drivers, they bring commercially viable solutions to the table rather than escalating operational issues.
4. Strategic Ownership: Rather than managing execution in isolation, leaders orchestrate workflow across teams, delegate tactical tasks, and focus on long-term strategy. This shift relies on mutual trust, clear boundaries, and shared accountability for outcomes.
Other Vital Skills for Business Leaders
Other skills that are vital for business leaders that can be developed first before employees land in managerial positions include:
- Communication and Emotional Intelligence: Articulate individual, team, and organisational goals clearly to align employees with the core mission. Understanding workload pressures builds an empathetic culture and boosts engagement.
- Strategic Thinking: Utilise frameworks such as the Business Model Canvas to visualise operations, prioritise high-impact initiatives, and step back from day-to-day execution.
- Data-Driven Decision-Making: Track key performance metrics to guide business decisions and provide team members with transparent rationales during strategic pivots.
- Adaptability: Identify external market shifts and underperforming internal areas early, adjusting strategies swiftly to build long-term business resilience.
- Delegation and Empowerment: Entrust team members with meaningful responsibilities to optimise executive bandwidth while actively expanding staff capabilities.
