Almost every successful large company started its existence as a small business. With growth being the traditional marker of success, it’s easy to forget the qualities that a large business loses in the process.
Have you ever been told “you’ve changed” by a significant other, or that you’re a different person to who you were when you first started dating? Hurts, doesn’t it? I’ve been on the receiving end of that particular comment myself, but these days, the tables have turned. It’s my job to tell large businesses that their culture has changed as a consequence of growth, and not always for the better.
Despite commanding eye-watering salaries and having thousands of people looking to them for leadership, CEOs of Australia’s biggest organisations often envy their counterparts in small businesses. This isn’t due to there being less stress or responsibility involved — with 90% of technology start-ups failing, simply meeting the payroll in a small business can be a nerve-wracking experience.
What makes the big end of town green with envy is a unique set of attributes possessed by leading-edge small businesses that are easily lost, and very difficult to recover, in large organisations.
Small businesses, generally through necessity are lean, agile, responsive, innovative, and great at personal relationships.
Generally, big businesses are … not.
In his introduction to Amazon’s most recent annual letter to shareholders, CEO Jeff Bezos stresses the importance of remaining a “Day 1” company. “I’ve been reminding people that it’s Day 1 for a couple of decades”, he writes. “I work in an Amazon building named Day 1”.
His point is that no matter how large or successful a business may become (and Amazon is an extreme example of growth), nothing can match the spirit, excitement and vitality of an organisation’s first day of existence. Bezos warns: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
So, what can be done?
To keep the vitality of Day 1, even in an organisation the size of Amazon, Bezos lays out four key tools:
- True customer obsession: “Customers are always wonderfully dissatisfied … and your desire to delight customers will drive you to invent on their behalf.”
- Always focus on results over process: In other words, don’t let the business process become the proxy for the result you want.
- Embrace external trends: Bezos writes that big trends can be hard for large organisations to embrace. “If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind”.
- High-velocity decision making: Speed matters in business, but large organisations struggle to make high-quality decisions as quickly as start-ups.
Establish a clear sense of vision and purpose
Look for the pain-points in your organisation that put the brakes on your ability to convert ideas into value. Where can you eliminate waste in your processes? Can you truly say that your organisation is as nimble as a start-up? Why not?
To rediscover the spirit of a small business, build cross-functional, highly motivated teams with a clear sense of purpose and empower them to make decisions. These teams should be self-organised with the ability to course-correct when necessary, while the manager’s role — rather than acting as the sole decision-maker — is to support those teams in becoming masters of their craft.
As Bezos writes, there are many ways to centre a team — they could be competitor-focused, product-focused or technology-focused, but the one focal point that will always drive true value is the customer. Encourage your team to obsess over how they can improve the customer experience.
Responding to change
These days, competitive advantage is (in part) measured by your ability to anticipate, adapt and respond to change. Being agile does not mean doggedly sticking to a plan set by the executive team 12 months ago — it means breaking your overall plan into iterative smaller plans, and having the autonomy to course correct as you go. Bezos advises: “You need to be good at quickly recognising and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
And finally — relationships!
Big businesses have become so efficient at communicating that the human touch is often lost. At the end of the day, decisions are made when people connect. These means that while you’re racing to automate as much of your operation as possible, don’t forget to humanise your processes where you can in order to retain (or re-establish) relationships across your business.
This article was originally published on the Lexicon Digital blog.