The fluid society: SMEs can grow by tearing down walls

Flexible working and “flat” firms are thriving thanks to the growth of collaborative technology. Developments in communication technologies are transforming modern businesses, leading to more fluid, less hierarchical workplaces. The archetypal office of the 20th century was filled with long, straight rows of desks and meeting rooms. As John McRae of ORMS Architecture Design writes, it was designed around the “employee’s need for privacy and peace and quiet, to focus in isolation on a certain task, only occasionally breaking out to meet teams or managers.” This is rapidly changing.

Research by Vodafone found that 86 per cent of employers now experience demand from their staff for flexible working, while nearly 60 per cent of the organisations surveyed equip the majority of their employees with remote working capabilities. Firms like the video game developer Valve are adopting radical “managerless” structures, while numerous other businesses are moving away from formal meetings and appointments to fluid, spontaneous “swarming” sessions.

And the barriers between businesses are also coming down. Increasing numbers of firms embrace crowdsourcing for innovation and funds, while large companies like Tesco and Virgin are providing support to smaller businesses through accelerator programmes and loans.

But the fluid business landscape can present challenges for SMEs. How can businesses manage communications across a sprawling network of remote employees, often operating in different time zones? Is corporate culture sacrificed when collaboration takes place between businesses and workers in different locations? Such obstacles are considerable, but evidence suggests it’s more than worth the risk.


Driven by improved communication software and a growing concern for employee work-life balance (Vodafone’s Fluid Society report found that 47 per cent of businesses say employees have become more interested in their work-life balance), flexible working is on the rise in SMEs. Some managers are no doubt reluctant – “bosses often feel like they have more control when they can see their employees,” says professor Andre Spicer of Cass Business School. But research suggests they needn’t worry. Regus, a serviced office space company, found that 70 per cent of managers reported an increase in productivity from flexible working, while 76 per cent of employers surveyed by the Chartered Institute of Personnel and Development said flexible working had a positive effect on employee retention.

But even firms sticking with the central office structure are embracing fluid working. PwC’s new More London building, for example, features “breakout spaces” for spontaneous meetings, and companies around the world are transforming the structure of their business teams. Morning Star, the largest tomato processor in the world, is one of a small number of firms adopting a “flat,” managerless structure, with business teams formed and reformed based on the work that needs completing, rather than existing corporate structures. Employees set their own goals, and collaborate with others as necessary. The company claims it is able to pay 15 per cent more in salaries and 35 per cent more in benefits than the industry average thanks to this fluid structure.


Not all companies, however, are equally suited to these better ways of working. And the recent news that all UK employees will have the right to request flexible working (and employers the obligation to give a valid reason if they refuse it) was met with mixed reaction in the business community. Some expressed worries that an inundation of requests could prove an administrative burden, especially for small businesses. Moreover, Spicer points out that some companies find it hard to recreate the environment for the spontaneous sharing of ideas when workers are stationed remotely.

And beyond flexible working, the fluid relationship between businesses and their customers can be highly demanding for small firms. A recent report by Vodafone (Have a nice day: Customer service beyond today) found that 23 per cent of 18 to 24-year-olds want to be able to use social media more to access customer service, but 41 per cent of people said that most businesses aren’t able to hold conversations using Facebook, with 44 per cent saying the same of Twitter.


But forward-looking businesses are turning these challenges into opportunities. The fluid relationship between businesses and their customers may be demanding for staff, but the ease of access means SMEs can use the increased speed of customer feedback to improve products and services. A slick, unified communications system means employees can stay responsive to these customer needs, as well as those of other staff. And Thomas Brown of the Chartered Institute of Marketing has argued that “breaking down the walls” between different business teams and departments can help with this.

Furthermore, the opportunities available to SMEs through collaboration with their customers (through crowdsourcing) and with other businesses are growing all the time. SMEs like Web-Translations, for example, are helping small companies expand internationally by translating and optimising websites for foreign markets. And collaboration with big business is also on the rise.

Japanese IT firm Fujitsu, for example, found that 58 per cent of SMEs said they believe that small and large suppliers should now be working together to win business. The company supports its smaller suppliers by providing supply chain finance to improve cashflow.


Raising money through public campaigns (crowdfunding), and using external groups to help drive business innovation (crowdsourcing), have exploded in popularity recently. According to data released this week by The Crowd Data Centre, over $351m (£209m) was pledged through crowdfunding campaigns worldwide in the first quarter of 2014, by more than 4m backers. Crowdsourcing websites such as Amazon Mechanical Turk, meanwhile, allow businesses to rapidly outsource time-intensive tasks that computers currently struggle with (transcribing, for example), at relatively low costs for smaller businesses.

Issues can arise. Coordinating payments to multiple individuals through crowdsourcing platforms is often logistically difficult. And with no direct lines of accountability between the business and the crowd, some firms have reported difficulties with managing the timing of projects.

But with the sources of funds and ideas looking set to grow (many companies, like Crowdcube, are building international platforms for cross-border investments), SMEs will increasingly be looking to tap into the capabilities of crowds. And according to Crowdcube’s co-founder Luke Lang, the buzz that crowd campaigns can bring provide and invaluable an invaluable extra source of publicity for small businesses.