You might think that small businesses have nothing to learn from their grown-up corporate cousins, but you’d be sadly mistaken. With their focus on profit and growth and comparative financial freedom, corporations are able to focus and innovate in ways that small businesses do well to emulate, and these innovations will help small businesses avoid some typical pitfalls.
Incremental Improvement Isn’t Always Enough
Feeling limited by resources and manpower, small businesses often go after incremental gains in product improvement. And little wonder, because this is an excellent way to do business. It is possible to grow revenue significantly and with little risk by making a series of small changes and monitoring the results of those changes. Web based businesses benefit from multivariate testing of new design and content elements to increase the appeal of their offer. However, continual focus on small tweaks may lead us to overlook game changing ideas. It also doesn’t allow us to see completely new market opportunities of which we could take advantage.
In contrast, corporations are often focused on large initiatives that have potential to generate many millions of dollars in revenue. They focus on making entry into new markets, or even creating markets where none existed. They create brand new products or redefine existing ones. While it is possible for small businesses to think big and take bold risks in the market, we tend to let our thinking be limited by the amount of money we have in the bank. By continually making small improvements as well as keeping an eye out for the opportunity to innovate in bigger ways, we can avoid the trap of small thinking. But if we stop thinking small, how will we achieve our new big goals?
Everyone Needs A Team
All this big thinking and doing requires more energy, both physical and emotional, than one person can possibly sustain. In fact, the kind of big ideas that enable us to spot a new market opening up or a new product that can be brought to market quickly are rarely conceived alone. If you are a solo entrepreneur or have a very small staff, how can you collaborate creatively and build a team that helps you think beyond your limitations?
Corporations build teams by hiring, outsourcing, and consulting. For small businesses just getting started, the paid team might consist of a single person. In that case, the other two options are open. Outsourcing can be effective if the task is easy to delegate with minimal oversight. Joanna L. Krotz says in her post, Tips for outsourcing your small-business needs, that we should avoid outsourcing our core capabilities, but she is bullish on outsourcing other services. Of course, Tim Ferris of The 4-Hour Work Week fame is open to outsourcing and automating most business processes.
I also expand my team by forming barter based relationships with other skilled professionals. This is rewarding because each participant will agree to the arrangement only if they trust and admire the other parties involved. It is a refreshingly different way to do business in our bottom-line world. But building a team is not enough, we also must stay vigilant to changing market forces otherwise, our team may have no work to do.
Be Ready to Change
Corporations focus relentlessly on emerging threats to their business. This may verge on paranoia, and I do not recommend carrying this marketplace vigilance to an extreme. Still, small businesses need to keep an eye out for change marketplace conditions that may offer opportunities or pose threats to future success. Staying plugged in to industry publications, connecting with industry leaders on social media, checking in with customers and watching your core business metrics closely may reveal ways to adapt and grow that you would otherwise miss completely.
When you launch a new product or service to great reviews and popular demand, beware the tendency to sit back and enjoy your success. Oh, of course you can enjoy yourself, but keep in mind that there are always things you can do better. Focus on those things as well as refining the things you do extremely well. Remember that when you launched your new initiative it wasn’t everything you had imagined, and keep a list of proposed improvements at hand. Get started improving before others pass you by.
Like your corporate counterparts, set large but reachable goals. When you reach objectives, immediately get started towards a new objective. Some business leaders do this so well that they forget to congratulate their teams on reaching milestones. Don’t forget congratulations, but re-set your vision so that you keep your momentum. This is an area that I often get bogged down. It is not easy to find new goals, so I suggest that you keep a plan that has multiple goals. When one goal is reached, another will take immediate effect.
What Have You Learned from Corporate Leaders?
I’ve been able to watch CEO teams and small business leaders closely over the last decade, and I have learned that there is always more to be gained by watching closely and following the example of the best leaders. The best leaders know when to take the focus off of making small improvements and go for the big vision. They focus on delegating to a great team rather than going it alone. And they expect, monitor, and embrace change.
Share Your Ideas
- What have you learned from the leaders in your life – especially those leading organizations larger than your own? Please comment on this post to share the tips or wisdom you’ve learned!
- Have you built a team around your small business in an unusual way? Speak your mind below.
This is my first post on harveyramer.com, and I’m waiting to hear from you so please don’t be shy!