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The most successful North West SMEs are investing in developing their people managers to lead by example, which filters down into their teams to build a positive company culture.
Leadership and management skills don’t come easily to us all. Whether you’re a new, aspiring or experienced SME people manager, everyone can benefit from upskilling, learning and development. The key is to assess and identify your development areas and seek out development to match. Well-managed Manchester businesses realise one training course or workshop does not bridge a multitude of skills gaps.
When HR Director spoke to HR leaders of ten large UK and Ireland organisations at the start of 2025, the overwhelming consensus was that striking the right balance of skills would be crucial in retaining management talent. Developing skilled, competent and confident managers is crucial in the face of the rising costs of running a business. In the face of increasing economic pressures, growing your team through recruitment may be unsustainable. Investing in upskilling existing leadership talent is a viable, cost-effective alternative.
In this article we explore the changing nature of leadership and management and consider:
The difference between leading and managing
What good leadership and management looks like
What it means to lead a team
How the leadership skills have evolved
Internal and external factors shaping the future of leadership
Top skills managers need in 2026
The seven pillars of learning and development and how they contribute to business growth
How to assess your strengths as a leader.
What’s the difference between leadership and management?
According to the University of Salford, Leadership is “inspiring and motivating people to achieve a collective vision, whereas management is about planning and executing tasks to attain specific goals”.
People often think of leaders as the figureheads of a business; those making the strategic decisions who represent the company on the big stage. In reality, every manager with a team is a leader. They are responsible for leading and inspiring others to achieve personal and professional success.
It is therefore concerning when leaders have the necessary skills to manage day-to-day tasks, but are not equipped to lead people. Failing to equip to be an effective leader is the downfall of so many small and medium-sized businesses. Managers are promoted to roles with direct reports without the proper support and development to understand how to lead them. We all need to do better to support our managers to be effective leaders.
What is good leadership and management?
The management style that worked a decade ago is no longer effective or admired.
The best managers and leaders recognise the challenges of the 21st century workforce and seek out development to equip themselves to respond. For example, the concept of ‘job hugging’ didn’t exist a few years ago. Today, managers have to understand how best to lead employees who find themselves in this situation.
What are the qualities of a good leader?
Operating in new external and internal contexts requires the ability to:
Set and communicate clear goals
Manage change
Maintain productivity
Prioritise and delegate
Consider the needs and feelings of your team
Inspire and motivate
Create a positive work environment
Manage conflict and handle difficult conversations
Support career progression.
The true value of good leadership emerges when you can demonstrate the mix of skills your company needs, and also represent what good leadership and management looks like to you personally. When there a mismatch between the two, leaders may be less effective.
What does it mean to lead a team?
Being a leader is a privilege, not a tool to control or manipulate others. Leadership is an opportunity to manage the minds and skills of people, and develop these for the benefit of the individual and the organisation. It’s a chance to shine a light on individuals with potential for growth and to support and encourage those who are struggling. This opportunity to create and influence career pathways for colleagues can be hugely rewarding. In developing others you can also create your own succession plan, allowing you to move on to the next step in your career.
While most leaders have direct reports, it is possible to be a leader without having a team. In a strategic leadership role it’s vital to maintain an awareness and oversight of people issues. These include engagement, motivation, performance, development, and succession planning.
If you or a member of your team are struggling with people management challenges, see how our HR Advice Line can help.
The evolution of leadership in the 21st century
Over the last decade, leaders have adapted to managing hybrid and remote teams, a multitude of legislation changes, AI and social media in the workplace. Today, SMEs are recruiting empathetic, inclusive leaders who are as au fait with the latest technology as they are with delivering a strategic plan.
The skills and qualities needed for good leadership and management are evolving:
Emotional intelligence: successful leaders also want to be liked by, and have fun with, their teams. This requires self-awareness and regulation, empathy, an ability to build intuitive relationships, inspire people with their ideas, and keep teams motivated, engaged, and focused on their goals. From an employee perspective, colleagues want leaders to empower them and help them to develop and flourish in their careers.
A less hierarchical structure: distance between leader and team has reduced, producing flatter structures where leaders find themselves on a peer level with their direct reports. Take care not to fall into the friend zone. It’s important to strike the right balance between being approachable and respected, consistent and fair, decisive and clear.
Pressure on decision-making: with data and analytics now available in abundance, leaders are under pressure to make speedy decisions. The ability to understand and analyse information quickly is an essential skill.
Health and wellbeing: according to Unmind research, 28% of managers have received no mental health training. Wellbeing at work is a priority. Leaders need to be in tune with the physical, mental and financial pressures on their team and be able to identify when someone might need help. Good communication skills, empathy and understanding are important in starting the conversation and supporting colleagues through challenge.
External factors shaping the future of leadership
Flexible working: Home, remote and hybrid working patterns all require flexible management. Keeping remote teams together requires excellent communication skills and the ability to continuously inspire, engage and motivate others.
A squeezed economy: Continuing financial pressures require leaders to do more with less. Budgets and teams are smaller, while workloads continue to grow. Leaders have to show resilience and creativity to meet the resourcing challenge.
Digital transformation: Balancing the challenges and opportunities of technology is a key leadership role. Managers no longer have to be physically with their team to communicate and lead effectively. While AI and collaborative technology can create efficiencies, it also creates pressure to make quick decisions and risks to data security.
Employee expectations: Managers must work hard to understand and deliver on the needs and expectations of different generations. Loyalty is declining, putting employee experience and engagement in focus, especially in the battle to recruit and retain top talent. Employees want to know ‘what’s in it for me?’: specifically in terms of flexibility, benefits, pay and rewards.
Diversity, Equity & Inclusion: Managers need to lead by example in creating a diverse and inclusive workplace where every individual feels psychologically safe and able to achieve their full potential. You must create an environment where everyone feels welcome, opportunities are equal, and people feel treated fairly.
Internal factors shaping the future of leadership
Workforce structure: Leaders must adapt to managing multi-generational teams with flatter hierarchies. You need flexibility, patience and emotional intelligence to respond to the needs of different generations.
A focus on culture: With external factors influencing a company’s ability to recruit and retain top talent, getting the employee experience right is vital. Leaders have a key role in building trust, encouraging collaboration, keeping teams motivated, satisfied and engaged with their work.
Burnout: Often a direct result of the squeeze on resources, declining employee wellbeing is presenting as stress, anxiety and increasing sickness levels. Workplace wellbeing contributes to individual happiness and productivity. Leaders must learn to prioritise their own health and wellbeing as well as that of their team.
Productivity: Maintaining productivity whilst managing costs and navigating continuous change is not easy. Leaders require strong analytical skills and a good understanding of AI and other technologies to make informed strategic decisions.
With the benefit of outsourced HR support you can tap into the knowledge of experienced HR Consultants when you need it. Whatever your people challenges, we are here to help.
In-demand management skills for 2026
Embedding diversity
Diversity, Equity and Inclusion (DEI) is here to stay and a key driver of business growth. Managers perform an essential role in embedding DEI into culture. We must be open to, and accepting of, different views and perspectives, and value everyone for their individual qualities and contributions. New recruits should feel welcome and see inclusivity at every stage of the employee experience. They want to feel confident of having every opportunity to fulfil their potential.
Embracing AI and Digital Transformation
The pace of technological change can be rapid and managers have to be equipped to keep up. From streamlining processes and creating efficiencies to generating data that guides decision-making, managers need to understand the uses, benefits and risks. We must learn how to harness technology for good. We need to feel confident using intelligent software to interpret and analyse data. If you cannot explain the business benefits, how can you help your team understand them?
Strategic foresight and problem-solving skills
Mastering the art of long-term vision is an essential management skill. Strategic thinkers create an inspiring vision of the future for their teams, which motivates them to contribute to its success. Strategic thinkers can make decisions under pressure to drive business growth. They anticipate problems and offer creative solutions to complex issues, always making considered, informed decisions.
Emotional intelligence and human-centric leadership
People-focused managers create a welcoming environment in which everyone feels safe and understood. Self-awareness and empathy are core elements of emotional intelligence that help build strong relationships. When you learn to manage your own thoughts and feelings and recognise them in your team it creates a positive atmosphere, improves team communication, and supports conflict resolution. People feel supported knowing their perspective has been heard and understood.
Continuous learning and adaptability
The best managers have a desire to keep learning and improve their skills - and inspire others to follow suit. It not only drives personal performance, but enhances and motivates. Going forward you can celebrate your achievements as a team. Continuous learning lends itself to being adaptable and responsive to change. With an open, flexible mindset, you do not fear change and build resilience within your team.
Sustainability and ethical leadership
Strong values and morals are a priority for younger generations entering the workplace. According to Harvard University, “a focus on sustainable, ethical management practice is key to driving an organisation’s success. Those who practise ethical leadership have positive corporate cultures where employees are engaged, motivated and feel good about coming to work.”
Build a culture of trust, respect and honesty that is visible inside and outside your business. Browse our e-learning catalogue for accessible online courses on all these themes and learn in your own time.
The Seven Pillars of Effective Learning & Development
At P3 People Management, we create clarity by dividing management development into seven foundational pillars. Skilled, high-performing managers need to understand and be able to implement each of the seven. Let’s take a look at each pillar in detail.
Personal effectiveness
Personal effectiveness starts with knowing yourself. Once you understand your strengths and motivations (and why they are important), you can focus on being your best at work. To be effective requires organisation, time management and delegation skills. You also need to be able to identify where you need to develop or improve.
Communication & handling conflict
According to the IC Index 2025, too much communication is better than too little. The good news is SMEs are more likely to get the volume of employee communications spot on. And despite the growth of instant chat, 65% of people say email is the channel they most rely on for company updates.
Failure to communicate can lead to feelings of frustration, isolation and conflict within teams - and when relationships break down, employees talk with their feet. Understanding what employees want has a huge influence on employee experience, and builds trust, engagement and employee retention.
Managers must be able to communicate well - to guide colleagues through change, give and receive feedback, and support career development. Active listening skills and open, two-way communication help with decision-making and boost confidence in conflict resolution.
Performance & development
Part of a people manager’s role is to support their team to grow and develop. Managers need to be equipped to guide their team to set goals in line with company strategy, to monitor and appraise performance and give constructive feedback, addressing performance issues as they arise. Leaders must seek out their own learning and development opportunities to set an example to their team, and know when to celebrate success.
Leadership & management
Some characteristics define a good leader. The ability to motivate and guide a team to create purpose and meaning at work matters as much as delivering results. Well-rounded leaders have the skills and knowledge to balance leading a team and achieving business objectives in an effortless way.
People management & HR
Leaders need to be equipped to manage and develop teams through each stage of the employee lifecycle, to retain talent within the business. The support of an outsourced HR function can be invaluable. From recruitment and induction to tackling employment law and ensuring every employee feels included, the scope of responsibility is vast.
Change management
Successful SMEs don’t stand still. Managers need to be flexible and able to communicate change effectively. Being able to support employees through periods of change is crucial to getting people on board and bringing them on the journey with you. Take a look at our Change Management blog for more on this.
Strategy & culture
Strategy and culture run through all six pillars. Both are integral building blocks of successful teams and organisations. Business strategy provides clear direction for where the business is heading and culture paves the pathway to achieving it.
You’ve no doubt heard the famous quote from management consultant Peter Drucker: “Culture eats strategy for breakfast.” It doesn’t mean strategy is less important than culture. It suggests that in a healthy business culture employees take responsibility for achieving the results that deliver the strategy.
The 2025 IC Index found that 53% of employees prefer to receive written information about their employer’s plan and priorities. A business strategy has no value unless managers and colleagues understand this and their role in delivering it. How do you communicate yours?
Good leadership and management starts with YOU
The most effective leaders start by focusing their own development before unlocking the potential of their team.
Assess your strengths and weaknesses
Look in the mirror and be honest with yourself. What are your strengths as a leader? Which areas of leadership and management do you struggle with? Don’t be shy! We all have them.
Try this self-reflection process:
Start by asking for 360° feedback on your strengths and weaknesses.
Think about good and bad experiences in the workplace and what you learned from them.
Review feedback from coaching conversations.
Consider the culture, strengths and weaknesses of your team as a reflection of your own abilities and mindset.
Develop your leadership and management skills
Assess your own performance to identify the areas where you need to develop your skills and behaviours. Common themes include:
Managing and supporting yourself and your team through change
Communicating effectively with others
Starting difficult and challenging conversations
Giving and/or receiving timely feedback
Enabling others to understand how they can improve.
Insights Discovery
Insights Discovery is an online questionnaire to help leaders build self-awareness, aid understanding, help teams connect, and build a more innovative, creative and productive workplace. More about Insights Discovery.
Browse our e-learning modules
Investing in management learning and development with clear links to business goals helps businesses to create an engaged and resilient workforce. We offer a choice of 100 CPD certified online courses to develop and upskill leaders via our e-learning portal. It’s a convenient, flexible and cost-effective way to acquire new skills and knowledge, and crucially build confidence.
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