Three reasons why small companies become bigger

Lately, I've had a lot of conversations with friends, clients and peers about how small companies can achieve business sustainability and growth. Unlike what’s written in many of the best selling "airport" business books, I don’t believe that there is one formulaic solution to consistent business growth. Clearly there are certain obvious areas of focus that companies need to deliver on to be more successful (like having good cash flow, building an image, networking, continually creating innovative services and products, etc.).

I’ve found that some small company leaders actually overlook more critically important components of their business because they either take them for granted (and don’t see the importance) or because they just can’t step outside their company for brief periods to objectively see huge gaps that exist. And, quite often, these gaps are actually creating stagnation year after year. Below I’ve highlighted three non traditional areas within Peppercom’s world that are taken very seriously and are vital to any current and future success.

1)    People, people, people – I’ve heard many “experts” say that employees are a precious commodity, so treat them well. Although the meaning behind this phrase is understood, the words commodity and employee should never be said within the same sentence. We learned a long time ago, that Peppercom’s culture, work ethic, personality and its very soul may have started with two founders, but the only reason why it exists today is because it is believed, reinforced and put into action by the wonderfully talented people walking the halls every day.

Many CEOs and business leaders try to short change employees on compensation, or believe it’s their responsibility to ensure that they never feel too comfortable in their jobs, or they simply motivate by fear or ambiguity. I never understood this philosophy. Employees are the life blood of every company and should be seen as the organization’s most important asset. Treating them with respect should be the most basic and obvious concept. Great leaders then take this to a whole other level by creating bonds with employees so that they truly feel that the company is theirs and are driven to do everything they can to make it succeed.

2)    Let them lead – There are just far too many micro managers who lead small companies. They’ve never figured out that once you’ve found talented executives who can perform, you need to give them space to grow and let them lead. One of the major reasons why companies don’t grow (or last) is because the small minded CEO won’t actually delegate any real responsibility. This often overloads the CEO with work that he/she shouldn’t be leading, while making it that much easier for those talented senior people to go find another job.

Let your people truly help the company grow by taking ownership of areas that are important. If you don’t trust them, then move on and hire new ones who can play those key roles.

3)    Risk taking 101 – Most companies fester for years without any real growth because they are afraid to take risks. I’m not saying that this is easy and I don’t endorse betting the farm on one horse that could either catapult the company or kill it.

Instead, risk taking should be a strategic part of a small company’s culture and decision making process to create points of differentiation, find new areas to increase sales and develop better products or offerings to build better client relations. Those companies who don’t take risks are in jeopardy of always becoming extinct because, undoubtedly, their competitors will.

We believe that risk taking is probably the most important reason for our marketplace sustainability. The affect on our organization has helped us to evolve into a firm that allows its people to make mistakes (a very important characteristic). Those risks have materialized into new crisis, sales, measurement, digital and other offerings that fall outside of the traditional public relations boundaries, providing real value to clients.

Comments

[Michael Moed]

Amen Ed. This doesn't just apply to small companies. I've worked for both very large ($20B) - medium companies ($250M) and elements you describe here were prevalent in organizational units within them. In the larger orgs, risk oftentimes runs contrary to established process, so the ability to run with a new idea is mechanized out of the system. Maybe that's why I'm no longer there...

[ed]

It's a lot easier to take risks in small companies because the attitude is typically more care free. People (for whatever reason) have a lot less to lose.