Thinking Small

Business Schools are traditional proving grounds for Corporations (and the firms that cater to them). The models and theories that are taught tend to focus on larger companies. More to the point- the business cases reviewed in class concentrate on larger companies and often (but not always) involving larger solutions that have less relevance to a smaller company. (Caveat: Most business schools offer some form of entrepreneurship classes and some even offer specialization in managing SME's)

I’m not wondering if someone who’s interested in smaller business can get enough relevant knowledge from the formal business training to make the investment worth it. The answer is in my opinion - most certainly. I want to opine from a new manager perspective about why working for a smaller company is a better choice- at least for some people.

While getting an MBA, HBA or a B-Comm can certainly make you a qualified candidate for Ernst and Young or Delloitt, it also makes you a prized candidate for Goldfarb and Dillard Management Accountants, with a team of all of 7 CAs.

Skill exposure
Business Schools intend to train people to be well rounded managers. It is once they start working that their skills become deeper in one function, and the skills they don’t use day to day tend to atrophy. A small company allows them to get exposure to the full spectrum of business functions.

People who work at larger companies complain that they get pigeon holed into a function, and the scope of their role is relatively limited. They are expected to be highly specialized and deep, but narrow in their knowledge. In small companies- employees- especially managers are expected to wear many hats. Because there isn’t the man power to have one person designated to (as an example) product strategy, you’re expected to do product strategy, plus design, plus account management and marketing and so on.

More Say
Larger companies are traditionally tiered and highly hierarchical. Smaller companies- while still hierarchical have fewer tiers and are thus, flatter. More to the point- each employee has a greater direct influence on the company, and their own role. If they have a great idea- they can walk into the President’s Office and pitch it, and chances are- the president will be receptive.
Try that in Verizon- I’m not certain you’ll get the same response.

Greater Exposure to the Cycle
In a larger company, it’s common to compartmentalize the offering cycle, much like the functions get compartmentalized. In smaller companies- it’s not uncommon to have someone who is the specialist and is deeply involved in every aspect of the cycle.

This not only is more gratifying in that allows people to feel more like valued contributors to the business’ health rather than just cogs that participate in an iterated process.

For the company the benefit is twofold: it lays the groundwork for ownership over the project, which is taps into the highest motivator available: Personal Pride. It also allows perspective that would otherwise be lost- and that is how each step on the cycle affects each other, for example: how design and planning stage of the cycle affects the post implementation support.

Agility
Smaller companies have ability to change direction more quickly than larger. That allows them to traverse economic downs with more ease, and add or drop offerings in its brand with greater speed.
Part of it is processes; some smaller companies have tighter processes that have smaller time frames, others have no processes at all, which allows them to practice more organically (although I do not suggest this).

Another part is clients; larger companies will likely have more clients or larger clients. Changing direction on them overnight is going to be far easier if you only content with 2 major accounts and 8 smaller ones than 200 major accounts and 800,000 small ones.

Employee number; Getting buy-in from 10 employees is going to be easier and faster than buy in from 20,000.

Salary/Compensation
I’ve sometimes heard from people that small companies tend to pay less than large ones. I’ve found no evidence to support this. One of my favorite sources for salary research is payscale.com- which shows where the range of salaries lies for different positions and levels of experience, so that allows you to see what consists of ‘competitive salary’. When investigating the salaries offered by larger companies, they often post a salary range, and it’s not always necessarily in the top echelons of the average.

Having said that- I’ve interviewed for positions at smaller companies where the salary was far below average, but that was more to do with that company and its approach to compensation rather than its size. More on compensation in a future blog post!

Another thing about salary is that it doesn’t give the whole story from a compensation package. I know smaller companies with lunch days where they buy the company lunch at the launch of a project, take your dog to work, flexible hours, negotiable vacation days, and other things that go beyond the bottom line to make it a better place to work that don’t register on the T-4 slip at the end of the year and you’d never find in a cubicle farm.

In Conclusion
Smaller companies have a vibe that are all their own. If you’re down with the smaller company culture- chances are you’re not going to happy in a larger company, but if your experience is limited to larger companies- you might not be comfortable with the expectations put on you in a smaller company.

One thing’s for sure in smaller ones companies though they can give you challenges and opportunities that a larger company never can.


Thanks to John Murray who is eagerly awaiting a blog post on pizza.