How Small and Nimble Businesses Are Beating the Big Corporations

During the Industrial Revolution, one key concept that developed was the idea of “scale.” Scale allowed companies to reach maximum efficiency in production, distribution, and profits. It also leads to the concept that “bigger was better.” This idea that “bigger was better” continues to play out in the strategies of many large corporations in today’s market space. The idea has worked well for the last 130 years. “Bigger” gave corporations advantages that small businesses could not get, but now things are turning in favor of small and nimble businesses.

Three key trends that have been identified in Hemant Taneja’s and Kevin Maney’s book, Unscaled, and which are changing the business landscape are (1) The emergence of platforms; (2) Technologies that can be rented; and (3) Artificial Intelligence (AI) replacing mass production. These three elements are letting small businesses compete against big corporations. The critical factor for success is the relentless focus on customers.

Large companies see their market shares being whittled away by small and nimble companies that have no scale, but who stay focused on customers, shift strategies, develop new concepts across platforms, and find ways to enhance the customer experience – “the market of one.”

There are four key things Jeff Bezos and Amazon focus their attention and culture toward achieving; not losing what Bezos calls “Day 1” attitude. The idea is built on the philosophy of thinking like a startup in decision making. The goal of Amazon is to avoid “Day 2” attitudes, which include rules, procedures and processes, protracted decision making, less customer focus and shooting for the middle in customers’ preferences and services. Here are Bezos’/Amazon’s four focuses:

  1. Customer Obsession. It is important to have an in-depth knowledge and understanding of your customer and a willingness to build products that fit a customer perfectly. The focus is on being a nimble company that is able to know and understand its customer, regardless of how small the customer base is and no matter how small the niche market.
  2. Resist Proxies. Large companies get lost managing things that are not important to the success of the business. When a large business starts looking at processes and not outcomes, the business has allowed size and scale to rule. When the focus is on doing things right and not doing the “right” things, the business will lose to the more agile business.
  3. Embrace Disrupters. The significant disrupters are written about all the time in the media stories, online, blogs, and the list goes on. The small and nimble business that thinks about and looks at how disrupters create opportunities has a greater chance of winning.
  4. High-Velocity Decision Making. Bezos states, “Never use a one-size-fits-all decision-making process.” Make your decisions on your customer’s realities. The bigger a business gets, the more information it needs to make decisions and its response to the market becomes slower. A slowed decision-making process leads to stagnation.

The market is changing. Businesses here in McAllen are competing against large corporations. If a local business understands disrupters, technology platforms and how to upscale, it can win. Several local businesses have seized the advantage they have by being small. What are you doing to compete?

See you in McAllen!