Did you know that eight out of ten drivers believe that they are above average, including those who have been involved in a collision? An interesting example of how confidence can be a barrier to progress.

The Times published a thought-provoking article earlier this month written by Anthony Impey, Chief Executive at Be the Business (“BtB”) – an impressive not for profit organisation whose mission is to help businesses level up. The article looked at the ever-building confidence SME’s have in their ability to thrive in, what can only be described as, pretty tough times. Akin to the results we found in our recent manufacturing report.

Anthony highlighted the paradox of business leaders believing in themselves, their staff, their infrastructure, and their skillset to thrive no matter what, but equally not taking the necessary action to actually convert the confidence being exuded, to tangible economic results.

Impey said: “This year I have visited a hundred small businesses across the United Kingdom. What I have encountered has been inspiring: a cadre of business leaders who exude resilience, determination and grit… The latest G7 Productive Business Index by our organisation, Be the Business, found that business leaders in the UK remain confident, particularly in comparison with some of their counterparts in other G7 nations. This bodes well for the UK economy because confidence is, undeniably, a crucial catalyst for growth[JG1] ”.

It reminds me a little of the fine balance of ‘fake it till you make it’ against authentically applying yourself to the best of your ability. When I started out in my career I, rather embarrassingly, seemed to believe I could take the office by storm, then the company and then the World. But I did little to work towards these things other than talk as sub-par game. My confidence blocked my ability to evolve in those early years. 

The economic data however, doesn’t lend itself to the optimist outlook, indeed BtB states “while confidence remains strong, economic data paints a different picture. The UK’s economy barely edged forward, with a mere 0.2 per cent growth in the second quarter of 2023, following a 0.3 per cent expansion in the previous quarter.”

Since I started my career shortly after the financial crisis of 2008, there hasn’t been a lot of certainty, or prosperity in the UK economy. So, with 15 years of the same data being presented, perhaps now is the time to accept that volatility or uncertainty is the new norm. Impey further expands on this trend stating that the UK has some of the most productive businesses in the world, but UK businesses overall lag behind their G7 contemporaries, resulting in stagnating wages and compromised standards of living. In the ONS comparison of G7 countries, the UK is right at the bottom just ahead of Japan but a long way behind the US.

So here in lies the rub – could it be the confidence that business leaders are displaying is actually making the problem worse? The research undertaken by BtB indicates that this is indeed the case and reveals a striking gap between confidence and action: a gap that is especially large for businesses in the UK. 

For example, Impey goes on to say, two thirds of UK business leaders say that their staff have access to the necessary technology to boost productivity but less than a third say that they are investing in new technology. In France the gap is less than half of this. We see the same pattern in areas ranging from operational efficiency to leadership and management: each time the gap between confidence and action is much larger in the UK than elsewhere.

Strikingly, BtB state that even a 1 per cent annual improvement in productivity over five years could adds more than £65,000 to a small business’s bottom line and contribute £94 billion to the UK economy. Certainly food for thought. 

So, the key take away here is nothing new, but an important reminder, remain open minded and committed to having an adaptable mindset. This involves being open to being wrong, and listening to those around you, as well as seeking guidance and advice from the right sources. Finally, nothing beats action.