Wednesday, 4 September 2013

What David Can Teach Goliath – what ‘small’ can teach the ‘big’ businesses

What David Can Teach Goliath – what ‘small’ can teach the ‘big’ businesses


David And GoliathThere is a plethora of articles and blogs about what small businesses can learn from large businesses but very few that turn the phrase on its head. So, what can large businesses learn from small businesses?

As usual our first dilemma is one of definition.

For the purpose of this article we need to recognise that there are small businesses which are essentially lifestyle businesses and there are small businesses which are being grown to be sold or ‘harvested’ (entrepreneurial businesses).

All the ‘motherhood and apple pie’ talk about small businesses revolves around attributes that most large businesses tend to lose with time and size:
  • Passion for the product
  • Led and run by the founder
  • Close to the customer
  • Tightly-knit
  • Innovative, responsive and flexible
  • Close to the marketplace
  • No silos
  • Able to make and create the rules.

The flipside of this is:
  • Too much in love with the product
  • Founder has too much control and becomes the bottleneck
  • Lack of professional management and reporting systems
  • Myopic
  • No career ladder
  • Doesn’t ‘do the research’ and makes (knee-jerk) decisions without the evidence
  • Doesn’t have the basic infrastructure (legal, HR, IT, cash reserves, R and D, resources)
  • Doesn’t have the network, scale, contacts.

For many, the reality of running their own business is rather sad. One single ‘entrepreneurial seizure’, those immortal words “I could run this better than they do”, sends the intrepid ‘entrepreneur’ on a desolate journey. In the naive hope that they will become the next Richard Branson, these people have actually started banging the nails into their coffin! In a belief that they now have the joys of wealth and freedom, nothing could be further from the truth.

Armed with puppy dog enthusiasm, blissful ignorance and the messages from one too many get-rich-quick gurus, our hero sets off. The reality is that, armed with no real business experience, our protagonist is now dependent on suppliers, staff, customers, banks and a belief that things will be OK. Often it is not.

There is, however, another version of this story. Our protagonist this time is more of an entrepreneur: they spot opportunities, gather together the resources and make something happen. This is a rather more sophisticated approach to the business of business than that of our, often hapless, lifestyler.


So what can Big Businesses learn?

Big businesses (even with relatively recent beginnings) spend millions on training and consultancy to revive or instil some of the characteristics their nimble but smaller relatives possessed: effective teams, positive morale, keen attitude, flexibility, people focus, listening skills, communication, commitment, engagement... these are the buzz words in each new initiative which will supposedly sort the future. The stereotype smaller business has all this in spades, already!

Smaller businesses, by their nature, by their place in the food chain are more nimble. Jobs do actually depend on success. There are rarely deep pockets or the possibility of being moved sideways if things get tough. When the money runs out, that is it!

While I am speaking in generalisations, there is this sense of nimbleness that the big business doesn’t just yearn for, but knows it needs to find, to compete in this furiously competitive world. What would a car manufacturer or a telecoms company give to have one-tenth of the passion or mojo that a small upstart would have.


Can Goliath work with David?

The old-world view was that the big boys were not even interested in small businesses. With internet explosion came the (naive) idea that the Davids could destroy and replace the cumbersome and slothful Goliaths; meanwhile the Goliaths continued to believe that they could destroy any potentially threatening minnows. Next the big boys tried to buy out the minnows and bring them in-house. That didn’t always work.

So, now we have a world where the big fish and the minnows can, and often should, work together. It is time for David and Goliath to work together. The combination of passion, excitement, innovation, free-thinking of the minnow, combined with the resources, funds, footprint, network, partnerships, access to market of the whale makes a fascinating combination.


Can Goliath learn from David?

Yes.

Despite all the upside of being part of a large multi-national, there are so many things that they just don’t get. They just need to look at sheer numbers that emigrate to work in start-ups (with all the inherent risks) to start to see just the tip of the iceberg of discontent and apathy that their workforce would rarely admit at work.


So, what is to be done?

Both parties (Davids and Goliaths) should engage more because they...
  • have a lot to learn from each other (formally or informally)
  • can exploit each other’s strengths to their own advantage (a ‘win-win’ situation).

The untapped potential is vast. The missed opportunity is vast. Time to pick up the phone?
Post a Comment