The power of the smaller business

There was a time when having a big business with a brand that everyone knew and respected was a prime corporate objective. Building and protecting the image was critical because the brand signified trust, shouting loud and clear that the organisation was at the forefront of development, stood for quality and had responsibility running through its veins.

There’s still truth in that, but every so often, a bad apple crops up, and with every scandal, the image of big business takes another knock. We’ve seen recent examples in the automobile sector – VW Audi’s manipulation of emissions testing, for example. And just in the last few days, Carlos Ghosn, Chairman of Mitsubishi and Renault, and the saviour of Nissan in the late 1990s has been arrested in connection with alleged financial misconduct.

I wouldn’t presume to understand the detailed circumstances that have led to these and other big-business scandals, but it seems to me that the very size of the organisations involved is a contributory factor. Can anyone in practice effectively control an organisation that’s international, multicultural and incredibly complex?

Big businesses must be divided into operating divisions. Management tasks and controls are delegated. Divisional targets are set and career progression depends upon their attainment. If the culture becomes one where poor performance cannot be tolerated because shareholder and stockmarket expectations must be satisfied, or because a bonus is at stake, there’s a problem. Mistakes are kept quiet, figures are tweaked, a positive spin is put on something that’s not quite right. In the end, it takes a whistleblower to expose the situation, and we all shake our heads and wonder how it could have happened.

There are, of course, other issues that arise when a big business becomes a locality’s main source of employment but then runs into trouble. In a global economy, size is no guarantee of long-term success. The argument that a business is too big to be allowed to fail hasn’t saved the jobs of tens of thousands in steel, mining and shipbuilding. Communities have been devastated and can take decades to recover.

Perhaps, instead of taking a swipe at the biggest businesses and the problems inherent in trying to control them, we should look at the opportunities and benefits of working with smaller businesses. Many of these have been set up in areas where a major industry or employer has gone to the wall. Where there are skilled workers, there is space for enterprise, and because getting a business off the ground is damned hard work, those who succeed have to be passionate about what they do.

The passion shows. Rapid response times, flexibility, new technology, agile decision making and innovation all feature. These are businesses which may not have a recognised brand, but they have dynamism, energy and belief. They are growing – and going places – and they’re not stifled by boardroom expectations. That’s because the board doesn’t comprise remote executives jetting around the world, raking in fat salaries, share options and incredible pensions. Instead, you’ll find these board members involved, day-to-day, hands-on, driving and delivering, investing, enjoying the rewards, yes, but also carrying a lot of the risk.

I’m MD of a family owned and run fabrication business. We’re growing all the time, but frankly, I don’t want to see a day when the business becomes complacent or relies on its past record, its name and reputation to gain business. I want to know what’s happening throughout our operation. I want to know the names of everyone on our team. I want to be actively involved in delivering great service, products and ideas, not because I’m a control freak but because that’s what makes being in business exciting.

I believe that some of our biggest businesses have forgotten that thrill. They are run by executives who’ve never clocked-on for a night shift or risked their own livelihood to create opportunities for others. Safe in  the ivory tower of their corporate HQ, they’ve become remote and believe they’re invincible. They’re not. A massive danger lurks – they’re in danger of losing their once loyal customers to businesses that actually care.