Bigger isn’t always better; upsets happen more often than you might think. David beat Goliath, the US beat the Soviets in ice hockey in the 1980 Olympics, and you can beat your large and powerful competitor, too.
It is no longer surprising to see headlines about corporate layoffs of more than 10,000 people or to read about huge companies merging or spinning off a major line of business altogether. Each such action results in huge internal change and chaos that leave the once iconic companies vulnerable to competition. Their employees’ focus naturally turns inward due to the turmoil, while the buyers in today’s marketplace demand more attention, not less.
Given this environment, it is the ideal time for small to medium-sized businesses to leverage the advantages of their size and to seize the vulnerable market share away from their mighty competitors. Here are the five most important best practices to focus on as you START your way to revenue growth and success.
Strategy: What is your differentiation and competitive strategy?
As the CEO of a global sales consultancy with clients that are some of the world’s largest companies, one of the most frequent challenges I see is the inability of a sales force to identify and articulate their company’s differentiation from their key competitors. Their old standbys of being global or tenured in the industry are more common among peers and less important to today’s buyers. Salespeople are struggling to describe why they offer a better purchasing decision.
Most small to medium-sized businesses have a clearer view of their differentiation because it was how they got their initial traction in the marketplace. However, my experience is that the expression of that differentiation stays too narrow, focusing primarily on product or service features or functions. Instead, leverage the clarity of your differentiation while broadening it beyond your innovations to include what value it will bring to your customers’ businesses. How will this make them more efficient, more profitable, or grow their revenue base?
Keep your sales and marketing messages focused on what benefits you will provide to your targeted buyers in terms that are important to them. That means your messaging should change over time to lead the growth of your company.
Talent: Finding, developing, and retaining the right people.
Big businesses are more able to cope with bad hiring decisions. If someone doesn’t work out in one role or department, their manager can often avoid one of those painful termination conversations with a bit of planning and will usually be successful in offloading them somewhere else in the company. Small to medium-sized businesses don’t have that luxury; each new hire comes at a high cost with little flexibility to reassign them to a different job if ill-suited for their initial role. Besides any recruiting or search fees incurred, the onboarding and training time to get new employees up to speed gets costly, leaving little room for error.
Best practices today for hiring the right talent involve using science. Psychometric assessments bring objectivity into the often subjective world of hiring. Industrial/Organizational (I/O) psychologists are trained to design tests that identify specific personality traits that are indicative of someone who will be successful in a specific role.
For example, our research for filling sales roles has found that hiring to personality traits is more important to success than even having prior industry sales experience. In today’s fast-changing world, versatility and inclination to change are the keys to success. Hence, hire to attributes, and train to competencies. If you have the time to invest in someone with the right traits, your training and developmental efforts will take hold more quickly and yield greater returns.
As your company grows, however, make sure you purposefully use both rewards and recognition to retain your best talent. Appreciated employees are much harder to woo away.
Agility: Observe and quickly respond to important market trends and customer needs. Big business is loaded down with bureaucracy.
I was on a conference call a few days ago with a large, global technology company. Including myself and our account manager, there were eight client personnel on the call. Half of the client attendees didn’t know their teammates, what their role was in their company, or why they were involved in the meeting. When we closed the call and summarized the next steps to finalize the multi-year contract, we learned the approval process would involve 16 departments and need four signatory approvals. And this was only a contract renewal! What a terrible use of the client’s time and money. The depth and breadth of processes and compliance requirements of big businesses can be like a heavy suit of armor, weighing down the speed and responsiveness of an organization.
In contrast, small to medium-sized businesses have the potential to capitalize on their natural agility and turn it into a compelling competitive advantage. While processes and guidelines are important to gain efficiencies and consistency as you grow, remember to keep agility at the forefront.
Being able to respond quickly to market trends and customer needs can accelerate you past slow-moving competitors. Size has been usurped by speed as the most powerful source of competitive advantage. Is your organization still agile? Are you piloting ideas and trialing new solutions in an environment of rapid assessment so you can leverage successes quickly?
Replication: Identify successes, uncover internal best practices, and replicate organizationally.
While I often see larger clients challenged to set clear expectations for “what good looks like” in any given role, success is more obvious in small to medium-sized businesses. In fact, my experience with smaller clients is that they tend to rely on heroism. This isn’t a bad thing as long as you keep your current heroes happy and continue to raise the bar with other employees to reach that same level of proficiency.
You need to leverage the source of success internally and enable others to do the same. These standout performers typically won’t know why they are successful. They’ll assume it’s their hard work, natural talent, or previous work experience.
Working with someone well versed in behavioral-based interviewing, you can uncover much of what your best people are doing differently in their roles and pinpoint the few things that are pivotal to their success. In the sales arena, we even use win/loss interviews with prospects to get third-party data on what specifically was most important in the decision-making process and why they chose to partner with the one firm over the others. Don’t be afraid to discuss those differences internally and use those discussions as valuable research to do things differently next time.
Share and replicate the identified success factors with your team. Document it, try it, improve on it, and replicate it within the greater organization. Sometimes it is as small as a disciplined action or behavior, while other times it is executing a specific strategic approach.
Transformation: Turn entrepreneurship into leadership.
As you might expect, employees in small to medium-sized businesses tend to have more attributes of entrepreneurialism than those in big businesses. People often hire employees in their own image when left to their natural tendencies. They think, “He/she is just like me. I am successful so they should be successful, too.” That higher degree of entrepreneurialism is a big advantage. It usually means less aversion to risk and more creativity, open-mindedness, passion, and drive.
My only caution is that you ensure those attributes are focused and kept balanced with other business needs. Your investments need to be leveraged across similar repeat business opportunities. It is rare that a one-off or “outside the box” venture is a wise investment in the long-term. Avoid the temptation to chase or develop every new and exciting idea or piece of business.
As you grow, qualifying opportunities for profitability becomes a vital foundation for success. In organizations with a prevalence of entrepreneurialism, it will take purposeful organizational development efforts to develop good entrepreneurs into great leaders. Since entrepreneurs tend to be fast thinkers, repeating their vision becomes arduous, and building into others can be exhausting; yet, both are required for great leadership. Entrepreneurial leaders need to proactively implement a strategy to cultivate and expand the leadership practices of their team to allow themselves to focus on what they do best while building up the company around them.
Focusing on these five elements—Strategy, Talent, Agility, Replication, and Transformation— can help you turn your company’s size into an advantage and achieve sustainable revenue growth. While you might need to START and re-START your improvement efforts along your growth path, keep the creative, can-do entrepreneurial spirit as part of your company’s culture even as you grow. Today is the perfect time for your small to medium-sized business to implement changes and find success even among the giants of today’s business world.