Stefano Maifreni is Founder & Director of Eggcelerate, the business expansion advisors.
Small companies often bask in the privilege of being fast on their feet — unshackled by corporate culture. However, can companies with few rules start to spiral out of control? Moreover, if so, how can this be avoided?
Anyone who’s worked for large, global enterprises will know how refreshing it is to be part of a leadership team at a small company. While SMEs can lack the deep pockets of their corporate counterparts, you can avoid departmental politics, stifling administration and that sense of being lost in the machine.
When new business opportunities come along, you can have a real impact. Decisions get made quickly, plans roll into action, and the results become visible. The sense of satisfaction is enormous, and the financial rewards may be significant too.
However, can all this ‘running free’ go wrong for small companies? Unfortunately, Yes.
Where is everyone?
Have you ever been out in the sea on an inflatable or a bodyboard? Maybe you’re enjoying the waves and splashing around with friends. After an hour, you return to shore, only to find everything is different and, worryingly, your clothes are nowhere to be seen!
However, after two minutes of panic, you realise that amid all the noise and excitement, you’d merely drifted. Bit by bit, you’d been swept quietly by the current. You look up and spot your family — 200 metres away.
Unfortunately, there’s a similar scenario that can affect small companies. It could begin to impact any smaller company going through significant business growth and change at any time. So how does it happen?
Five steps to chaos
Growing organically as a small company sounds natural and healthy. However, it could be straightforward to lose sight of what you’re all about and to lose connections with each other.
Imagine a small company of ten people that’s been operating 18 months. Business is going well, the client base is growing, and now there’s a new round of funding to take things to the next level. Full of optimism, the company expands.
Here’s what might unfold…
- Step 1: In the early days, the founders had a clear idea about company objectives. However, nothing was written down; it was so ‘obvious’. Today everyone has a different interpretation of these goals.
- Step 2: The workforce increases from 10 to 15 and then to 20 people. However, nobody gave the new joiners a clear vision of the company. Often, there’s no time to explain everything.
- Step 3: Big decisions need making. However, the once-united management team is now at loggerheads. Their hopes for the company seem to clash. Each accuses the other of being reckless, having a lack of imagination or losing the plot.
- Step 4: Rather than being agile and nimble, the company seems to be stalling. The passion has ebbed away. Staff lack direction and inspiration.
- Step 5: Customers start to notice. They’re getting mixed messages depending on whom they speak to about new features, support issues or order completion. It feels like a mess, and they lose confidence in the company.
So, can this scenario be avoided? If you make some essential changes early on, then Yes.
Keeping yourself focused
Yogi Berra, the American baseball star in the 1950s and 60s, was well known for his pithy statements. One often-attributed quote goes like this: “If you don’t know where you’re going, you might wind up someplace else.”
Small companies might even want to have this framed and stuck up in the conference room because there’s a fundamental truth here.
Going back to our seaside analogy, if you don’t keep yourself level with a visual marker on the beach like a clump of palm trees or a cafe — while being buffeted around in the surf — then you’ll be someplace else soon enough.
You need to fix on something, keep checking yourself against it and make it your destination.
Down to earth
There are things we all loathe about the corporate world. However, some practical tools and procedures keep companies anchored — and can be calibrated to suit smaller companies too.
Many of us have wasted hours in conference rooms thrashing out a corporate Vision, a lofty Mission and a set of Values — only for these to amount to a vague wish-list.
However, Vision/Mission/Values can work well for smaller companies and be the roots of effective operations if you approach them in the right way and use them correctly.
Small companies should aim for a ‘light’ version of these, perhaps just a couple of lines under each heading. Think of this as minimal governance: Something simple and down to earth. The earlier you lay them down, the better — and they can become the “one” story you share with new employees.
So how does it work in practice?
Balanced and focused
Rather than forming a strategy to conquer the world, this is about setting a clear direction that everyone understands. Try to see your Vision/Mission/Values as tools to drive the right decisions in day-to-day business and to place the right level of governance around them — not too much, not too little.
You can do this if you are small AND if you know where you are going. It’s the best of both worlds.
Small companies can still retain their ability to adapt and be agile. However, when circumstances change, you won’t be blown off course. There’s a danger within small companies to play everything by ear — or for the ‘issue of the moment’ to suddenly overwhelm everyone. Your Vision/Mission/Values will help you to keep balanced and focused: you can check decisions against your goals without it being bureaucratic; you can make decisions quickly too, without the swirl of the involvement of too many emotions. It’s far less likely that people will fall out with each other. Moreover, if they do, you’ll be able to see who’s gone adrift.
That said, it’s essential that you don’t set your strategy in stone. Also, this is another advantage you can have over corporations. Because your goals are lightweight and flexible, they can adapt quickly. You can feedback what you’re learning as a company — and revisit your Vision/Mission/Values and your strategy from time to time.
Checks and balances
If crafted carefully, your goals won’t throttle your growth. Instead, they’ll serve as useful checks, balances and inspiration to help you to thrive.
If you rarely end up needing to refer back to these guides, then that’s great. However, if the waters get choppy or you want to ride some monster waves, then you’ll know whether the company is sticking to its correct course and headed in the right direction.
Stefano Maifreni, Founder & Director of Eggcelerate
Passionate about helping companies to succeed with their business challenges in effective and profitable ways. An engineer by education, product manager by role and expert at achieving growth by career, Stefano has an outstanding track record in business strategy, operations, product and marketing, with extensive P&L management and international expansion experience.