Competing With Big(ger) Business

by James Lucas

GO BIG!

GE trumpeted this new motto in its annual report—an appropriate slogan for one of the biggest companies on the planet. The message? We’re big, and we’re going to exploit our size. We’re big, and we intend to get bigger. We’re big—and you’re not.

There’s no question that size matters. But the problem is equating “size” with “durable” or “competitive.” Just looking at General Motors and American Airlines is a reminder that size can be a liability, a millstone around the economy’s neck.

Ultimately, no pleasure or success comes from growth alone. Only cancer grows just to be growing. Using that as a model, many organizations are both large and cancerous, malignantly destroying wealth and careers.

How do we compete with big business? If we’re small, how do we compete with other businesses that are small but bigger than us? Whether you’re competing with a company making $5 million per year or $5 billion, the question is the same: Given the size advantage, how can we win?

The first key is being the right size—right for your customers, right for your market positioning, right for accomplishing your vision, mission and strategy. Many customers would rather be a larger account of a smaller firm than the reverse. Being too small to exploit an opportunity is a problem, but growing faster than you can support the growth is no less tragic.

 

How to Compete with Size

- Use smallness as a competitive advantage—You want personal service? Speed? Fast problem resolution? We’ve got them. It will take you a month with those guys—and you’ll spend half of it talking with overseas operators.

- Use smaller as a definition of “freer”—Avis understood early on that being small means you have less to defend, less to weigh you down. You can think and act in ways that big(ger) organizations simply cannot. Revolutionary ideas never come from the reigning monarch.

- Deploy resources more intelligently—Just because they have 1,000 people doesn’t mean they have 1,000 effective people. If you have 50 passionate, thinking, high performers, you may have more than they do. Make sure that every one of yours equals five or 10 of theirs.

- Treat everyone as an idea machine—In most big organizations, ideas come from a handful of people, particularly at the top. If you have everyone innovating and they only have 5 percent innovating (a common—maybe even generous—estimate), you might both have 50 people innovating. Unlike theirs, many of yours will be close to the customer or problem.

- Learn from, but don’t imitate, their successes—They have a lot of resources and can try a lot of things. You don’t and can’t. But you can see what they’re doing that’s working, unshell it to see the core reasons, apply it to your own products or services, and then put your unique “small” twists on it. You’ve got to avoid trying to match them, though, on a product-for-product basis.

- Let them be your R&D department—Big organizations (think Bell Labs) are often better at sensing opportunities than they are at exploiting them. Watch what they’re talking about, what they’re touting on their Web site—and then transform it into your own quicker-to-market masterpiece. They’ll still be filling out forms while you’re filling out your bank account.

- Don’t grow up to be like them—Many small businesses flounder because they tried to copy a big organization’s structures or people practices. Those things are unnecessary products, rather than drivers, of growth. You’ve got an entrepreneurial “feel?” Don’t trade it for big and bland.

Many large organizations mention their needs: flexibility, speed, aggressiveness, fresh ideas, everyone thinking like an owner. In other words, they need to be small. They want to think small, act small, and come across as a neighbor regardless of their gargantuan size. They want to GO SMALL.

If you are small, they want to be like you. But since you’re already small, if you’re leading well they can’t beat you at your own game.

James Lucas is ?president and CEO of Luman Consultants International, Inc., a leadership consulting practice. He can be reached by phone at 913.248.1733 or by email at jlucas@lumanconsultants.com.