Management Matters
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Management Matters

Four Things Big Businesses Can Learn From Their Smaller Counterparts

How to move the elephant in the room

Photo by Wolfgang Hasselmann on Unsplash

Note: This is my follow-up article to the one on the “Four Mistakes Small Businesses Make While Dealing with Big Businesses” (link:https://bit.ly/39racvD). Any post can be read in any order.

There are numerous advantages that big businesses have over their smaller counterparts. The classical ‘economies of scale,’ the sheer size and investment capability, rich talent pool, creditworthiness, and diversity are some of the major ones, to name a few.

However, not everything is perfect with large-sized business groups. With time, their sheer size becomes a source for many vagaries. Senior leadership, time and again, attempt to reset and rejuvenate these large organizations. In fact, on most occasions, making a structural and cultural turnaround is on the top of the list of the incoming CEO of a stagnant mammoth firm.

What are these issues that bug the majors? Any answer to this question will be a long list of problems specific to the nature of the industry. Here, I have listed just four common to most industries and which the smaller firms usually get right. Let’s have a look where our smaller firms score over the larger ones, hands down:

#1 Employee engagement

From what I have learned with my experience with both the large and small firms is that, for a loyal employee, it is generally more difficult to quit a small firm than a large one.

There is a vast difference in the employee motivation initiatives when those are planned with the primary motive of achieving KPIs of an HR executive v/s when those are meant to make the employee valued.

Smaller businesses treat their employees more as an individual. The staff generally have easy access to the founders. The founders often understand their people well and know them personally. Any warm gesture is thus well measured and targetted to ensure that it is received with the same enthusiasm it is expected to generate.

In one instance, I noticed that the performance incentives were being given to the employees based on what their spouses would like. I was told it worked wonderfully since people had the pressure to secure the incentive from their households. This entity was into the retailing industry with exceptional employee loyalty and customer service standards.

In larger firms, it’s usually the ‘one size fits all’ approach. Shy people are put in a spot by being asked to sing or dance in the name of employee engagement. Larger firms need to calibrate the effectiveness of their employee engagement and motivation initiatives to ensure there is no time-killing yet meaningless engagement session.

#2 No time for nonsense

Anyone who worked with a major firm can immediately count at least five processes, audits, and guidelines that make no sense. The evolution of processes in major firms is a maze in itself.

By the time a process is put into practice, it is often noticed that it’s serving every other purpose than it was meant to serve. Complexities add on with time and render the end-user trying to comply with the process without fulfilling the purpose.

Smaller businesses have no time for nonsense. The effectiveness of any new initiative is comparatively much higher. Any process not fulfilling its purpose is discarded immediately.

The major firms can learn to evaluate and be agile to discard the processes not fulfilling the expectations. However, it comes down to the KPIs of a senior manager who wanted to earn some browny points with the new process and is reluctant to roll it back despite looking at the downside.

#3 Sustainable profitability

We live in the age of startup unicorns and have been enjoying loads of free lunches thanks to our own pension money going into the burning cash of these startups.

These free lunches will halt one day, and the startups will have to find a way to make profits. The profit that the small businesses have no option but to sustain from the word go.

Small businesses have to fend for themselves each day. Even the debt they take has to be repaid within the short to medium term. Small businesses often can’t even endure two consecutive bad seasons of business.

These requirements make the small firms maintain some good habits and discipline in not spending what they can’t pay for. Consequently, the growth is consistent and sustainable, not destabilizing the world of finance.

#4 Changing lanes

It is difficult for our elephants to change the direction once they have ventured out towards one. Once the large firms have committed to a project or a cause, it becomes an obligation to sustain despite there being no business or economic sense. Amusingly, everyone in the projects knows that it will sink, but no one bells the cat by calling it off and save on future losses.

Small entities do not have the luxury or patience though they do try out multiple new activities on various fronts. They are well aware that out of the ten-odd initiatives, only one or two may stick. They are more forthcoming to discard any idea that is not working and move on.

There is a lot on both sides in the battle of the big v/s the small businesses to learn from each other. The smaller firms could also adopt various strengths of their larger counterparts, such as planning, organizing, professionalism, and so on. Some small businesses get evolved into big ones. They should keep handy the recipe for their success while they were small and retain the good ingredients out of it.

Recapping the takeaway for the big bosses to get their act together:

  1. Figure out ways to engage with employees on an individual level, not the usual ‘one size fits all.’
  2. Review redundancy regularly and do away with the processes not adding enough value.
  3. Maintain discipline and ensure sustainable profits.
  4. Be nimble to make course corrections rather than stretching things out for too long.

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Divyansh Raghuvanshi

Divyansh Raghuvanshi

'The Manager' with interests in international affairs, fitness, humour, history, data science, and traveling. Currently experimenting with writing.

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