Teaching The Big Boys To Think Small
Last week I told you about a recent report from The Conference
Board that has a lot of big company CEOs concerned about
competition from smaller, more innovative and
entrepreneurially-minded companies. To refresh your memory, The
Conference Board's CEO Challenge 2004 reported that 87% of the
540 global businesses surveyed cited innovation and enabling
entrepreneurship as priorities for their companies, and 31%
considered these issues of "greatest concern."
These CEOs understand that their big company status no longer
guarantees that they will win contracts and retain market share
based solely on their size and track record. They understand
that the greatest threat to their businesses is not coming from
the boardrooms of their largest competitors, but from small
companies born in garages, on kitchen tables, and in tiny,
rented offices.
It's a fact that smaller companies, by need and design, are more
innovative, more flexible, more decisive, and faster to move
than their larger brethren who are entrenched in operational
processes and corporate procedures. Small companies are
typically not led by career executives for whom every decision
must be predicated by hours of meetings and mounds of
documentation. Most small companies are led by their founders;
men and women who were cut from an entrepreneurial cloth that
has yet to fade. It is when a company grows to the point that
the founder steps aside to make way for professional managers
that the company loses its innovative nature and entrepreneurial
flair.
The good news for large companies is that they have definite
advantages over small companies, especially when it comes to
resources and funding. Turning a Goliath into a raging horde of
David's is never easy, but it can be done if the company is
willing to make changes to internal processes and attitudes, and
commit the time, money, and personnel to make it happen.
Since size and number of years in business are no longer
differentiators in the competitive marketplace what must large
companies do to become more innovative and entrepreneurial? To
begin they must do three things: shorten the process time, cut
through the red tape, and promote innovative and entrepreneurial
thinking from the top down. If the board, the CEO, executives,
managers, supervisors, and employees are not dedicated 100% to
making the changes necessary to transform the company, the
effort will fail and the giant will lumber on.
Shorten The Process Time At large companies everything is done
by the book, i.e. by established processes and procedures. Very
little gets done at large companies without what I call the
"Multiples of M." Multiple Meetings to discuss the issue;
Multiple Memos to reiterate the issue; and Multiple Management
approvals required to sign off on the issue. To become more
innovative and entrepreneurial large companies must streamline
the decision-making process down to a single set of M's: Move on
or Make it happen.
Cut Through The Red Tape Here's a true example from my corporate
days that illustrates how procedures and red tape get in the way
of efficient operations A fluorescent bulb in my office blew,
which made the other bulb in the fixture flicker like a strobe
light at a discotheque (causing flashbacks that we won't
discuss). I assumed getting a new bulb would be a simple matter
of calling down to the facilities office and reporting the
problem. My assumption was wrong. I was told that I would have
to come to the facilities office, which was in another building
2 miles away, fill out a facilities request form, and take the
form back to my immediate supervisor, who was required to stick
his head in my office to confirm that the bulb was indeed out
before signing the form. I assume this was to make sure that I
was not trying to commandeer a fluorescent bulb under false
pretenses.
Once my supervisor confirmed that I really did need a new bulb,
he signed the form and I took it back to the facilities office,
foolishly thinking that they would hand me a bulb that I could
take back to my office. Oh no, that would have been too simple.
I was told that once my form was approved by the facilities
manager a maintenance worker would be dispatched to my office
and would replace the bulb for me. Great, I said. When can I
expect that to happen?
"I can have someone over there a week from Tuesday between noon
and 5pm," the man at the facilities desk replied. I suddenly
felt like I was dealing with the cable company. How many big
company employees does it take to change a light bulb? I lost
count at four.
Encourage Innovation and Entrepreneurial Thinking Next, you must
create an environment in which innovation and entrepreneurial
thinking are encouraged and rewarded. If your employees feel
that their opinions, thoughts and ideas don't matter, they will
not submit them to you, but may take them elsewhere.
Again, based on my own experience, I can tell you that
innovation, especially innovation that occurs below the
management level, is often ignored, ridiculed, and in some
cases, used as an excuse to give employees the boot. The perfect
example of this was when I took an idea on how to improve an
internal system to my manager and was told, "Knox, you think too
much." Now this was a new one on me. I had been accused of
thinking too little and of not thinking at all, but never had I
been accused of thinking too much. I do recall my dad telling me
when I was young, "Son, if you had a brain you'd be dangerous."
I suppose my manager was simply trying to relay the same
message. "Shut up and go to your room/cubicle like a good little
boy/company drone before you get on my nerves and get
spanked/fired." Within a few months I decided to take my
overactive brain and put it to work for myself. After 10 years
of business success, I think I made the right decision.
To promote innovation and entrepreneurship big companies must
encourage everyone to think like innovators and entrepreneurs.
Make it a company policy that such thinking is required,
expected and rewarded. Pose these questions: (1) How can we
improve our current products and services; (2) What new uses can
you think of for current products or services; (3) What new
products and services can you think of that would be good
additions to our current offerings or perhaps even launch a new
line; (4) What new opportunities do you see in the market place
that might be worth pursuing?
Get Outside Help Most large companies find it difficult to
develop and implement an innovation plan simply because they
refuse to devote the time and resources to getting it done. And
since most executives have never been entrepreneurs, they do not
know how to encourage entrepreneurial thinking among their
ranks. If your company needs help with innovation and
entrepreneurship, bring in someone from the outside to direct
and manage the effort for you.
You should never be embarrassed to ask for help, no matter how
big you are.
Here's to your success!
Tim Knox