Startups vs. Large Corporations… Why Size Matters!

Posted by on September 30th, 2013 - comment(s)

You have to admit, over the past decade entrepreneurship has really taken off as a ‘career path’. Academic institutions are providing courses around entrepreneurship, accelerators are accessible in any remotely recognized city, and the media continues to glorify the successful bunch that have created billion dollar companies in their parents’ basements. Entrepreneurship has become damn right sexy and when you tell your friend, next-door neighbour or any academic that you have your own business, you are usually greeted with some praise or a pat on the back.

Now my intention here is not to debate whether this is right or wrong, nor am I planning on diving into the unsexy and raw truths of an entrepreneur’s life (all of you entrepreneurs out there already know this); I’m more so writing to tell you what not to do when and if your organization expands into a ‘large’ corporation. The size of the organization matters and as business professionals we need to know why it matters to be able to use our size to our advantage at any given point.

I have to be honest on this one though, this is not scientific research or a survey of hundreds of C level executives, but more so a candid perspective from an individual who has worked for two global organizations with 10,000+ employees each and started his first company at the age of 16 selling unlocked cellphones back when data and smart phones weren’t so hot.

The reality is that large corporations are seeing the explosion of entrepreneurship and the many benefits it has from a ‘mindset’ point of view. Successful entrepreneurs are nimble, quick-to-react decision makers, and C-Level executives want to instill these critical traits in their leaders. It’s not that they are aloof and blinded by all of this; they are just faced with an immense amount of resistant in their organizations, simply due to the scale. It really opens up the conversation to accepting and embracing change and lessons on change management that leaders in large corporations have to embody in order to be able to successfully adopt and shift the mindset of employees (but even then, scale is bound to get in the way).

So as an entrepreneur that aspires to grow your business into a large organization (or if you are part of an existing large corporation) make sure you don’t lose sight of the following:

Keep an outside perspective

Groupthink and inwards thinking happens all too often in companies today. When you get so big and have so many people to manage, there are endless layers and boxes to tick, which makes companies forget about their consumer (not necessarily who buys the product but who uses or consumes the product). They focus all too much on what they do and why they are different and not so much on what the market is doing and why the market might be different in a year from now. Always ask for an outside perspective and be open to feedback.

Put process before structure

All too often companies hire employees simply to fill in the “vacant” spot on the organizational chart. Rarely do people ask whether the chart is still relevant. Most small companies (i.e. start-ups) start with no structure and begin hiring and assigning duties based on processes. They learn, adapt, and grow based on adding personal and creating better and faster processes. The big companies did that when they started as well but the challenge is to keep questioning and revisiting it. Always make sure your team, department, business unit or organization is structured around key processes not the other way around.

Don’t fall in the decision-making wreath

Layers, layers, and layers. Size equals more people, more leaders and more decision makers. Small equals less people, less layers and quicker decision makers. To no one’s surprise, large companies often take an extremely long time to make very simple decisions. They have hierarchical structures, task forces, leadership teams, you name it – all with the purpose of making sure the decision is the right one. The problem is that in the world we live in today, information travels so fast and often times when a decision is made and implemented in a large organization, it is already too late. Don’t go in circles when making decisions. Understand your capabilities, understand your environment, and make sure you are staying true to your organizational principles – and then make your decision.

Author:

SamK-photoSam Kashani

Brand builder by day and aspiring entrepreneur by night

 

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