Three things big business can learn from small business
Tuesday, April 7, 2015/
Have you ever felt restricted by the way you define your business’ success? Do you base your success on revenue, profitability, headcount, number of offices? These might be many of the traditional characteristics, but to me an important measure of success is the ability to ‘act small’.
Throughout my career, I’ve worked in complex multinationals as well as fast-moving startups. The defining factor in all of the most successful organisations has been the ability to ‘act small’. That is, retaining all the best elements of a small, nimble business while growing.
To make sure your business keeps all the best parts of a high performing small business as you grow, here’s how you can ensure you act small and remain the envy of the laborious big end of town.
1. Hire the right people, the first time round
Ever hired someone who was 80% right on paper but ended up being 100% failure? Unfortunately, it’s a common story. Small businesses live and die based on the people they hire. Research we commissioned last year found 56% of new hires fail to meet their job specification within the first two years. So, even after the average 60 days and $15,000 it takes to hire, over half simply fail to work out.
The impact one wrong hire can have on an organisation is huge, particularly in a small business or team.
The impact doesn’t get any better as businesses grow. As you hire more people, you acquire more processes and more places for bad hires to hide. The longer a bad hire goes unnoticed, the more your business will suffer. This is why it is so important to hold on to your ability to hire the way you want.
The trouble I have experienced in larger organisations is that line managers and senior leadership have very little involvement in the hiring process. As a leader in a small business, it is critical to stay close to hiring.
A wise man once told me that the best people can be ten times more productive than an average person. Next time you meet one of the best, hire them, and don’t worry about paying them more than you would have to pay a “good” person. They’ll be worth it.
For me, the two traits on the top of my check-list are resilience and intellectual curiosity. A fantastic mix if you are looking for someone to attack opportunities with minimal direction and management overhead.
2. Focus on culture – it’s great people that make a great businesses
As the chief executive of a company with offices in the UK, Canada, and Australia, I have set myself the goal of making sure the great employees we have spend most of their time and energy on tasks they are fantastic at. It’s not always easy but the payback is worth the commitment.
In large businesses, too many managers expect team members to be ‘all-rounders’ or tackle jobs they don’t excel at. While it’s not realistic that people should pick and choose the work they do all the time, there’s a lot to be said for playing to people’s strengths.
How do you balance this in a small business? While it’s important to develop some areas of weakness, it is far more important to develop and foster passions and strengths. To many, the allure of working in a smaller company is doing exciting work that directly affects organisational success. You should always work to support this. People doing work they are passionate about will make fewer mistakes and create less work for others around them.
3. Set ambitious goals, move fast, fail fast and then get up and repeat
To me, the ability to move fast and set your own goals is what defines a great small business. I’ve seen many fast-movers steal the market share of incumbents because they innovate faster and try more options.
Innovation and speed are important, however, the most critical aspect of ‘acting small’ that many larger businesses shy away from is being prepared to fail. As soon as you know something’s not working, stop it or change it. Adapt, improve, evolve – as rapidly as you can.
Some larger businesses are often held back by processes and legacy systems but more often than not, it’s a culture that is reluctant to embrace new and daring ways of working that holds them back.
At the core of it, the best small businesses succeed because they are driven by passion, have a safe environment for the team to innovate and feel safe trying new things (and failing fast), and are driven to be great.
Just because your team is small, does not mean you can’t change the world. Always remember to ‘act small’ to remain the envy of the big end of town.
Ben Hutt is chief executive of The Search Party.