Acting Big When You're Really Small
An Essay About Missed Opportunities and Introduction of A New Definition
We have been introduced to the definitions, methodologies, and applications of how companies should operate according to their relative size. I'm sure this sounds familiar, ‘smaller companies are more nimble, can pivot faster, ...’. Holding most variables constant, these business theories are pretty sound. However, it all hangs on a company, department, or team (herein collectively referred to as organization) properly identifying themselves. I want to specifically focus on the scenario where an organization perceives themselves larger than they actually are.
Further, what does it mean when you have an identity crisis? Even if “crisis” is too strong of a word, your organization's perception and size relative to your competitors or as defined by industry can really impact operating culture and the strategic culture set by leadership.
What determines size? The answer is not amazing, ‘it varies.’ The size of a group can be determined by the number of full-time employees, annual turnover, market share, balance sheet, and more, depending on who you ask. I will also add the ‘complexity of systems and processes in place.’ Meaning, the less nimble you are, the more you may believe you are operating a large, complex business. I added this because it also strongly plays on feelings. The other metrics listed above are cold and factual. However, the actual processes and IT tools utilized have a relationship to the employee’s sentiment of the role and company.
Thus, the abundance of defining metrics has allowed perception to be the strongest determinant rather than facts.
What’s the harm? Let’s take a look at a scenario with the definition I introduced above. With a self-designation that you are a large organization due to your systems and processes, you are naturally biased against innovative applications due to the perception of the resources required to upgrade. Many leaders lack the proper inputs of the risks that obsolescence brings to their operations and strategic initiatives. The inability to act decisively results from team members' internal bias as to what is priority, risk, and value.
Therefore, the above organization could be surpassed by competitors, fall behind on cost improvements, encounter the inability to attract and retain top talent, and more. If, from the beginning, the culture set forth by leadership clearly communicated that they need to operate like a start-up, circumstances would be different.
The best approach is segmented, but all pointing to the same strategic objective. Consider a newly established restaurant. There are various roles, objectives, and all oriented around a larger common goal. I can see the restaurant's marketing arm acting big by spending capital and positioning themselves against the competition. Meanwhile, the Food Purchaser may want to ditch antiquated one on one interactions for an automated system where global/local/niche vendors are bidding to fill orders.
Therefore, your organizational behavior should be driven by objectives disregarding the biased inputs of how or if it can be done due to your size.
If any of the above rings true, share this with someone who may relate.