The size of a company is only relevant to the extent that it provides different opportunities and challenges. By itself it means nothing.
That said, the size of a company affects the distance the company has to go to accomplish something.
Let’s look at two countries to clarify the concept of distance.
Canada, A Huge Country With Large Distances
Canada is huge. Figure that the Canadian border with the USA is about 4,000 miles, varying on how you measure it.
Estimates are that it would take 55 hours of continuous driving to go from one end to the other.
The distance from the southern most and northern most points is about 2873 miles.
Let’s call these distances the INTERNAL DISTANCES.
To accomplish something WITHIN the entire country of Canada you have to go a long way.
Canada is also relatively isolated geographically. It has only one country adjacent to it, the USA.
To accomplish something with the outside world — to connect involves going a long way. Let’s call these distances the EXTERNAL DIFFERENCES.
Then There’s Switzerland
On the other hand we have Switzerland. Canada is 242 times the size of Switzerland in terms of area. To travel across Switzerland east to west takes about three hours.
The external distances are also quite different. Embedded in the middle of Europe, one will be within one and a half hours driving distance to another country.
So, let’s consider Canada as the large corporation, and Switzerland as the “small business”. How do these distances affect their capabilities?
It’s All About Distance To Connect
The internal distance of an organization is the distance between the very top of the organization (that would be you if you are the owner), and the very bottom of the organization (the employees who make the business function).
The external distance of an organization is the distance between itself and its customers and suppliers — those outside the organization.
So here are some things to consider comparing Canada (Big Business) vs. Switzerland (small business) in terms of their capabilities. Let’s look at it from the point of view of the leader (the “owner”) of each country.
- The leader of Switzerland has far more ability to connect to those internal to the country, just as is the case with the owner of a small business.
- The influence of the leader(s) of Switzerland in terms of establishing values, mission, beliefs, pride and passion is in theory far more extensive than in Canada, simply because it’s far easier to have one on one contact with the population (e.g. the employees, if we are talking small business).
- Switzerland can act far more quickly than Canada in certain distance related ways. You could build a new rail line in Switzerland far more quickly than in Canada. In short, the smaller the distances the faster one can move.
Small = Speed, Greater Control, Greater Influence
Think of it this way. If you own a single restaurant, and want to change the menu, you can do so in hours. If you own McDonalds and want to change the menu, how long will it take?
The External Connections
It’s the same for making external connections with those in the larger community (in this case Europe), customers and suppliers. Lots of things are easier when distances, both actual, and psychological, are short.
The Small Business Advantage Of Short Distances
So let’s consider the small business.
The distance between the top (the owner), and the customers are so very much smaller than in a large company. The owners (well, heads) of IBM, McDonalds, and other corporations don’t connect directly with customers. It’s something they can’t possibly do on any regular basis. They can influence externally ONLY through others, and that blunts their direct ability to impact on customer service.
They have to go a long way (just as in Canada) to connect. Small businesses are Switzerlands – where you can, at least theoretically, pop into a car and go visit your neighboring customers.
That means a lot of things:
- The owner of a small business has direct access to customers, and is in better positions to understand them, their wants, needs, preferences and so on, AND coupled with the ability to change quickly, and in some cases on the spot, is better able to flex to those needs.
- The owner is also in a much more powerful position to INFLUENCE the perceptions of customers and potential customers by his or her personality, values, and how customers and potential customers are treated.
- Likewise, the distance between company and suppliers, being shorter means that owner can use much more personal influence in negotiating those deals, particularly with other small businesses.
- Finally, because much of small business is done more personally, and more directly by owners, small business have a much easier time of establishing beneficial partnerships with other small businesses, which can be a major way to counter the larger marketing budgets of huge companies.
- The business owner has much more direct personal contact with employees, too, so s/he has much more influence over their commitment levels, morale, skills and behaviors.
- Since internal distances (to staff) are shorter, small businesses can be more agile, quick to change, and able to experiment, not to mention they are in better positions to know and understand their client bases.
Bottom Line For Small Business
Provided small business know NOT to try to compete where big businesses have advantages (e.g. price, out-marketing), it’s quite possible to compete in ways that big companies cannot emulate.
That “ground” has to do with focusing on customers, providing a personal, happy experience, and making the business enticing because of its warmth.
