We’ve recently seen the end of the myth that smaller companies, cash-strapped and resource-light, are the only businesses susceptible to disruption. From O2 and BlackBerry to Nationwide and Natwest, global giants are experiencing major, high profile instances of downtime that is causing outrage and disaffection among customers. If it’s not down to a lack of resources, what is the issue with the modern enterprise?
Enterprise hurdlesI was recently involved in a roundtable debate including the likes of Intellect, BDO LLP and Ascencus, which found that the challenge many larger companies are facing is one of a generational divide. There’s tension between today’s young, tech-savvy and mobile-ready workforce (with its expectations of 24/7 access to core information and resources) and the older workers, the “digital immigrants”, who either don’t fully understand or fully embrace emerging technologies, but will likely be in charge of purse strings. It’s a question of management; with new initiatives caught between internal politics and a fear of disrupting the status quo, how can companies instigate change to deliver around the clock efficiency? To overcome this, I’d suggest larger companies look to the “little guys” for inspiration. Although both large and small businesses measure success by the health of their bottom lines and financials, necessity also dictates that they operate on very different sets of principles. Increasingly, the limitations of smaller companies are also providing opportunity. Limited resources and financial backing dictate the need for overheads to be kept as low as possible at all times, meaning new technology is often seen as an enabler and a disruptive force in a positive light, rather than a controversial one. On-demand solutions, smartphone and tablet integration, flexible working, cloud computing – many startups can now neglect the traditional organisational blueprint and even bypass investing in office space at all. Successful smaller businesses can be run purely on operational expenditure, and the result is a flexibility and open-mindedness with regards to new ways of working, to help improve resilience and efficiency. What’s more, there is a legitimate perception of the “small business mentality” – the idea that having fewer resources and customers leads to resources being worked harder, and customers being treated with more care and attention. Recent research from SunGard Availability Services, for example, found that, while larger companies prioritise information and resource availability, they do so with the financial bottom line in mind, with customer satisfaction and service coming in as a secondary priority. As these bigger businesses have to balance the demands of investors, stakeholders and the board, operations spread across the globe and employee demands, the focus on customer service must be rekindled.
A network of innovationWhile completely changing to a start-up mentality isn’t feasible for larger enterprises, they should look to turn necessity into opportunity, just as we’re seeing with successful smaller companies. Yes, larger companies are fragmented and sprawling, with operations spread over different geographies, time zones and cultures. Yet this very network provides the opportunity for improvement – rather than seeing an enterprise as one colossal beast, why not treat the different departments and offices as small businesses in their own right? Each local department will come with its own requirements and ideal practices, in response to the different surrounding contexts and ambitions. Here is the perfect opportunity to trial new technology and ways of working in microcosm – testing the waters locally and then rolling out elements that work as appropriate, on a larger scale. Far from a tangled web of politics and inertia, this approach would allow an organisation to extend into new ideas and innovation, without compromising central operations and that all important bottom line. And any enterprise that can balance this forward thinking with a healthy set of financials would be something to shout about. Nelson Phillips is professor of Strategy and Organisational Behaviour at Imperial College London.
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