This relationship between external knowledge providers, e.g. consultants and academic institutions, and small and medium enterprises (SMEs) is a difficult one.
SME entrepreneurs think external advice is expensive, not required and/or not useful. In this paper these arguments are explored against the specific characteristics of SMEs.
The argument of price probably tells more about the consultants inability to quantify the returns on their advice than about the cost of their services. Support policies enable free consults for SMEs on numerous topics, but the use of these facilities is relatively low. The suggestion that SME entrepreneurs do not need external knowledge is contradicted by their own assessment of their qualities. Typically the entrepreneurs lack expertise in supporting business functions like HR, IT, Finance and Legal. In SMEs these blank spots are not compensated by specialist staff members because the of the scale of the organization. The argument that the advice of an external consultant is generally not useful raises the question whether the insights gained in several business sciences only apply to large companies. This seems unlikely. Given the characteristics of SMEs the difference is probably more the context in which the insights are applied than the content of the insights itself.
From the analysis of the characteristics of SMEs the dominant influence of the person of the owner/director, together with the absence of specialist staff, appeared as two of the most significant differences between SMEs and large companies.
Given the personal profiles of these owners/directors as studied by Blom (Blom, 2001), the external knowledge providers should realize the three ways in consulting. The first way is the way of thinking. For this way it was stated already that the content of business sciences is not likely to differ for SMEs. The second way, the way of working, represents for the way information is gathered and the entrepreneur and his staff is involved in the process of developing the advice.
In this way the consultant should allow for interaction and should make it fun for the participants. In this aspect, the process approach of consulting shows promising.
The third way, the way of communicating, represents the way the knowledge is transferred from the advisor to the entrepreneur. In this way it is crucial to acknowledge the different personal profiles of SME entrepreneurs and consultants and to adjust the communication accordingly.
Taking the three ways into account, the conclusion could be that the transfer of knowledge should be more the sharing of experiences. The Chair of Management Consulting will adjust her activities to explore this insight further.