Business owner should recognize virtues of small, dynamic firm


March 04, 1991|By Mark Stevens

When small business owners set out to improve their companies' performance, they often look to the Fords and the Exxons of the world for inspiration. Case histories about the inner workings of the billion-dollar multinationals are supposed to guide the little guys to "do it like the giants do."

But this practice, based on the theory that big is better, fails to consider that, pound for pound, small companies often are more creative than the Fortune 500 they're supposed to emulate.

The truth is, American business may be well served by taking a page or two from their smaller brethren. The trappings of small business that are often dismissed as crude and unsophisticated are actually prescriptions for success in companies of any size. Rather than trying to rid themselves of these characteristics, small companies are advised to keep them alive and well.

What are the classic traits worth preserving in your business? Consider the following:

* The Get-It-Out-Of-The-System Free For All: In modern corporate America, etiquette rules the roost. Typically, when managers and employees want to air complaints or put forward new ways of doing things, they must go through a formal communications process, generally sending memos up the chain of command. In this environment, stepping out of line by raising voices or making blunt assessments of other peoples' work is considered ill-mannered and counterproductive.

But as small companies know, putting management and employees together for a no-holds-barred, give-and-take session is more effective than a thousand memos. Yes, some egos may be ruffled, but this is better than maintaining unworkable programs that put the company at a competitive disadvantage. Etiquette has its place, but it should never be allowed to dictate internal deliberations.

* My Job Is More Important Than My Title: Venture into a giant corporation and you'll be faced with a blizzard of titles. Manager of this, assistant manager of that, assistant vice president of everything.

But, as most entrepreneurs recognize instinctively, this can lead to a bureaucratic quagmire so burdened with titles and organization charts that people are more interested in protecting their turf than in getting the job done.

To avoid this, well-run small companies give their employees clearly defined responsibilities and pay them well for superior performance on an individual basis and as a team player. Those who prefer to engage in hair-splitting over titles and office sizes soon learn that they have come to the wrong place to work.

* Knowing When to Cut the Cord: Look closely at the staff of a corporate giant and you'll find that at least 5 percent of the names on the payroll are deadwood, allowed to remain with the company because no one has the gumption to dismiss them. Rather than weeding out the mediocre performers on an regular basis, management prefers to shift them to other positions or to "kick them upstairs" to their level of incompetence.

Although small companies are often criticized for dismissing underachievers without trying to redeploy them in the business, the determination to prevent mediocrity from becoming a tolerable level of performance is a strength small companies should seek to retain. Although firing people is a painful step, it is preferable to sacrificing the company's survival for the sake of diplomacy.

* The Healthy Fear of Failure: There's no denying the fact that everyone in business for themselves is worried about tomorrow. Will a new competitor eat into the company's market share? Will a technical innovation blow the firm's product out of the water? Although these fears are often dismissed as the phobic concerns of seat-of-the-pants entrepreneurs, the fact is that a healthy fear of failure is the best defense against complacency.

Making everyone in the company recognize that "Yes, the roof could cave in tomorrow" keeps management and employees scanning the market, fine-tuning their product and finding ways to better service their customers.

Of course, small companies can learn from their larger brethren. But in the effort to develop more sophisticated procedures, entrepreneurs should not abandon the dynamic qualities that make their businesses agile, responsive and capable of rapid growth.

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