Strategic adaptation: leadership lessons for small business survival and success

Purpose - Approximately half of all new businesses fail within the first five years of operation. This study was undertaken to understand the behavior of small business (SB) leaders, including their decision-making processes and adaptive leadership practices that enable their organizations to survive during periods of general crisis and intense competition. Design/methodology/approach - In order to understand the lived experiences of our research participants, a constructivist grounded theory approach was used. Thirty-two CEOs and leaders from fifteen organizations were interviewed. Findings - It was determined that successful SB leaders avoid organizational complacency by being continuous learners, who are agile and flexible in determining appropriate management strategies. Additionally, they leverage time management processes, build strong and productive relationship networks and create positive family-oriented workplace cultures to increase their odds of survival. Research limitations/implications - This qualitative study was limited to interviews, observations and analysis of organizational archetypes; therefore, the authors can establish a pattern in behavior but cannot make a causality claim. Practical implications - The findings provide SB leaders with effective concepts, practices and strategies from members of their peer group, which they can test, refine and implement. Social implications - The impact of business failures is often devastating financially and emotionally for the families and employees involved. Learning methods for strategic adaptation that may help avoid business closures could provide a positive societal contribution. Originality/value - There is little empirical research about how SBs strategically adapt during challenging periods. This study helps fill that gap and provides an understanding of how SB leaders adapt to continuous challenges, create value and remain competitive in difficult business environments.