When Is Bigger Smaller?
“Think Small” was a 1960s era advertising campaign by Volkswagen. It sold a lot of Beetles.
It brings light to the fact is that big is not always better. More interesting, though, is that being small in business can make your business bigger.
The desire to be big.
Most entrepreneurs dream of growing their company, and some have really big dreams. The drive for accomplishment -- of seeing a company that you have built from the bottom up expand -- is a natural one. Greater revenues are a measurement of accomplishment. It also doesn’t hurt that larger companies are more trusted by customers and investors, and hence getting bigger makes it easier to get even bigger.
Being big, though, creates problems. As a company grows, it becomes less flexible, less customer-centric and, to some degree, indifferent to its investors. The very aspects of being small -- being agile, frugal and responsive -- that help companies grow are often the first things that disappear when growth is realized. Small helps you get big, which in turn kills what made growing possible.
Staying small on the inside.
Ideally, you would stay small and continue to grow. And you can. The key is being bigger but remaining smaller in your operations and mindset.
Inside of every big company is a small company screaming to get out. Employees do better when the rules, policies and procedures are short and simple. Customers are happier when they experience true customer service, and the organization works better with the fewest moving parts (departments, divisions, layers of management).
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As you grow your business, keep thinking like a small company. Remain customer-centric, as well as investor- and employee-friendly. Even the largest companies -- big in revenues, headcount or capitalization -- can retain a corporate culture that stays focused on a mission and finds the smallest, fastest, cheapest ways of accomplishing their goals.
Start by reducing bureaucracy.
Bureaucracy exists to keep people from doing dumb things. Hire smart people, give them simple guidelines, and they will execute very well.
Flatten the organization.
Every layer of management causes distortion in how the organization sees the common mission and in the amount of decision-makers involved in each move. Flat is small, and small is beautiful.
Break the company up into realistic divisions.
Divisions are necessary, but each tempts the creation of silos. The number of divisions should be as small as possible, and each should have a discrete role in accomplishing the mission.
Get as organizationally small as possible.
At some point, adding people causes more problems than it solves. Working with fewer hands creates consistency and keeps everyone agile.
I did all of this while at Micrel, where I served as CEO for 37 years -- from its founding to when it was acquired -- and it worked extremely well. One customer called us the biggest little company they knew. All our customers felt they were treated well at every turn. We worked hard, but achieved great things including a nearly unbroken profitability streak.
Enjoy getting big, but love being small.