When Small Company Thinking Beats Big Company Thinking

I love being the CEO of a small company. It’s the best job I’ve ever had. One of the biggest reason is the speed at which we operate. Having worked for three multi-national corporations and the U.S. military for 22 years, I have a lot of experience with the often-slow pace of large organizations.

It makes sense that big companies take longer to get things done. Based on their size and complexity, they need formal command-and-control processes to ensure local units carry out the wishes of the head office. While there is a lot of talk about empowerment in big companies, the truth is employees at lower levels still don’t have a lot of authority.

In the past ten years, I observed a significant shift in authority from local units to headquarters of the large companies I worked for. It became harder and harder to get things done in the local units as we waited for approval from above. Even though I knew the importance of command-and-control, I became increasingly frustrated with the bureaucracy of big companies.

Running a small business for the past year has been a breath of fresh air. We seem to run at a pace that is ten times faster than the large companies I worked for. One example is implementing an on-line ordering system. I worked for six years in one company trying to get the approvals and support to implement a simple on-line ordering tool. At my new company, Peak Demand Inc., we got it done in six months.

Here are some times when small company thinking beats big company thinking:

1. Action vs. discussion. Big company thinking says we need to discuss the idea and present it to upper management for approval. Small company thinking says, “let’s do it!” At my new company, we made the decision to hire a great employee in five minutes when we heard he was involved in a restructuring and was available.

2. External vs. internal focus. Big company thinking means spending a lot of time in business reviews and internal meetings. Small company thinking means spending more time with customers. At my new company, my time-on-task for customers is nearly 100%. With fewer internal meetings, I have more time to travel and spend time with my customers.

3. Trust vs. suspicion. In big company thinking, there’s a tendency to question people’s motives, especially if they are from a different department or business unit. In my big company experience, I spent countless hours in meetings working to resolve disputes between various units. Small company thinking says there is no time for that. In my new company, we work as a team and trust that each person will do his part for the overall success of the company.

4. Performance vs. politics. In big company thinking, it’s about who you know, what you wear, who you went to school with, what type of car you drive, and what you say in front of senior management. It’s about looking good not just being good. In a small company, performance is the most important measure of success. Limited budgets, limited resources, and critical deadlines means every employee must be action-oriented. Those that can’t perform at a high level, won’t make it, regardless of who they know.

5. Today vs. tomorrow. In big company thinking, there is always tomorrow. Decisions and approvals come at a glacial pace. I recall once working for over six months to get all the signatures necessary for a capital improvement project. Small company thinking says it must be done now. In my new company, we use an expression, “ship it.” It’s a simple phrase that says, I’ve reviewed your project, it looks good, you have all your bases covered, “go for it!”

The good news is that big companies can think and act like small companies.  I saw it early in my career working in a large corporation that gave power and authority to local, autonomous business units. Each unit acted like a small company and was entirely responsible for their business. The result was strong performance, empowered employees, and quicker results.

Whether you work in a small company or a multi-national corporation, speed is essential in business today. Big company thinking can lead to endless meetings, internal focus, lack of trust, politics, and a glacial command-and-control process. This will erode the performance of any business.

How is the thinking in your business? Are you fast and nimble or are you slow and cumbersome? Do you empower and trust your people to make the right decisions or do you require approval for every activity? Do you spend countless hours in internal meetings or are you on the road visiting customers? Comment with your thoughts below.