3 key things big businesses can learn from small businesses
7 min read
16 February 2015
The saying ‘good things come in small packages’ may not apply to all things in life but when it comes to business, small really can be beautiful. When I say beautiful I mean efficient, agile, productive and focused. Not particularly romantic I know but these qualities are important to every business owner I’ve ever met.
In my career, I’ve worked in everything from large and complex multi-nationals to innovative and fast-moving startups. That experience has shaped my thinking on what truly makes for a successful business, which in my view is less about ‘being small’ and more about ‘acting small’. By ‘acting small’ I don’t mean limiting what is possible for a business to achieve, in many cases size has no relationship with potential impact. Rather I mean acting like you’re a lean and agile startup so you can react quickly to fast-moving changes in customer behaviour and competitive pressures.
To get your business operating more like a high performing small business here are three ways big businesses can learn from the actions of small businesses.
1. Hire the right people, the first time round
Small businesses live and die based on the people they hire. With a small number of people and each one performing a number of critical of roles, every person plays an important part of day to day operations. When you hire a bad person the impact can be huge and felt across the organisation, which is why getting it right the first time matters.
While the same is true in larger businesses, it’s far easier for under-performing hires to go unnoticed for longer. Research we conducted found 56 per cent of new hires fail to meet their job specification within the first two years. That means after the average 60 days and £15,000 it takes to recruit, over half simply don’t work out.
To avoid making poor hiring decisions big businesses should adopt the mindset of ‘this is one the most important decisions I will make this year’. When this is so, you will be more likely to explore all the opportunities open to you in finding the right candidate and leverage the sophisticated tools out there to help.
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.
Personally my two most important areas to explore with people are whether they are resilient and “intellectually curious”. Given these two, people can achieve almost anything they put their mind to with minimal direction and management overhead!
Read more about what businesses can learn from others:
- Irish business: What the UK can learn from our neighbour
- Three things large firms can learn from startups
- Small business guide: How to compete with the big brands
2. Focus on culture – it’s great people that make a great businesses
As the CEO of a company with offices in the UK and Australia, I make it a personal goal to get the people that work in my business spending most of their time on the work they’re really great at. It’s not always easy but the payback is worth the energy.
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.
Instead of focusing on developing the weaknesses of individuals, I advocate developing and fostering individual strengths and passions. When someone is doing more of the work they really love and less of the stuff they don’t, the benefits to the business can be huge. There will be less mistakes, less rework and less mess for others to sweep up.
3. Set ambitious goals, move fast, fail fast then get up and repeat
Small businesses are often credited for succeeding because they move fast. That’s certainly my experience with the fast-movers stealing market share because they’ve innovated faster than the incumbents can.
Innovation and speed to execute is one thing, but the key is to accept up front that you won’t be right all the time and be 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.
Of course there are lots of reasons big businesses can’t move as quickly. Size presents challenges in achieving agility and responsiveness but in most cases it’s a culture reluctant to embrace new ways of working that’s holding companies back, not their actual capacity to change.
At the core of it, the most successful 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. It’s this mentality that I encourage all big business leaders to embrace. Start by ‘acting small’.
Just because your team is small, does not mean you can’t change the world. Big businesses can create small team within them to be innovative, but if this approach is taken senior leadership support must be real and visible to the rest of the business.
Ben Hutt is CEO of Talent Party.