Perform together: gaining growth momentum in SMEs through employee involvement

Small and medium-sized enterprises (SMEs) play a pivotal role in fostering economic growth and development. However, only a limited number of SMEs succeed in achieving substantial growth. While the literature on firm growth is extensive, there remains a notable gap in academically rigorous and practically relevant research on the role of employee involvement in SMEs as a catalyst for growth momentum. In this paper we investigate with a rigorous mixed-methods study how SMEs can leverage their most critical asset – employees - by integrating them into strategic and organizational processes to facilitate growth. Our findings identify two key drivers of employee involvement: (1) the dissemination of the business model to employees, which enhances their understanding of organizational objectives, and (2) a supportive organizational climate, which fosters employee motivation. Furthermore, we determine that a minimum threshold of employee understanding of objectives is necessary to initiate growth momentum.