What small business has to learn from large enterprises?

Time and again some of the scholars have written and documented what large enterprises have to learn from the small businesses; especially the flexibility, agility, entrepreneurial zeal and ability to manage things with lean systems. The emphasis is especially on the fact that ‘small is beautiful’. This is true, an enterprise of any size needs to be flexible and fast enough to respond to the market changes and small enterprise where the decision making is fast surely has an edge over others.

In this line of thinking, I wish to focus on certain areas where the small business has to learn from the large enterprises. The first thing what a small business has to learn from large enterprise is the process orientation. It is found that small businesses lack this orientation and this puts a limit on the scalability of the organization. Business activities and processes which are standardized helps in many ways to a small business. Small businesses needs to put the systems and processes in place and with decreasing cost of certain technology this is possible and feasible.

Another thing which is essentially needed for enterprise of any size and mainly small business is the strategic thinking. Small businesses need to learn the strategic thinking and strategic management processes from the large enterprises. Talent management is another area which demands attention of small businesses nowadays and especially in knowledge based industries. It is seen that small businesses have need based man management system, rather than a strategic view of talent management. This is one more thing which small business has to learn from large enterprise. Not only this if the entrepreneurs wish to professionalize their operations then they might have to adopt objective way of managing people and their performance.

Focus on branding and marketing is another aspect of business, which is often ignored by small businesses and this, is the area where the large enterprises score well. My argument is not to spent huge money on advertising and promotion, but a consistent and careful approach in crafting the value proposition and focused marketing. What is needed for small businesses is to learn from large enterprises ‘outside in’ approach and outward thinking. In line with large enterprises, small businesses should look at developing and building the platforms and not just the products.

Scalability is another thing which a small business should learn from the large enterprises. However, if the points mentioned are considered, it would be easy for small businesses to scale up. And finally, the financial discipline is another thing which small businesses need to learn from large enterprises. Absence of centralized budgeting systems and annual financial plans often leads to inconsistent decisions related with finance in small enterprises.

Small is surely beautiful. It is observed in the recent past that large enterprises are burdened by their weight. In such scenario, large enterprises have become inefficient and very expensive to manage. However, small businesses have a lot to learn from large enterprises.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI

Giving For Those Little Shoeless Feet

I found interesting story about TOMS and Mr. Blake Mycoskie. Blake is from Los Angeles, and is the Founder of TOMS (www.toms.com). TOMS represents “Shoes for a Better Tomorrow”, and not any Mr. Tom. Blake is an entrepreneur. Before starting TOMS company, he has started five ventures, one of those has been a very successful national campus laundry service. TOMS makes shoes and eyewear for young men, women, and children. But style and designs are not just two things for which TOMS exists.

With One for One movement, TOMS has really Started Something That Matters. Under One for One movement, for every pair of shoes purchased by the customers of TOMS, one pair of new shoes is given to a child, who is in a need to protect his or her feet but can’t afford to buy on his/her own. This simple looking shoelessness problem is the reason behind Anemia, Podoconiosis, Jiggers, Tetanus, and other soil-transmitted diseases, injuries, and infections in many developing countries such as Argentina. Shoes are a compulsory part of school uniform. When children don’t have shoes, they are not part of the education. In 2006, Blake Mycoskie saw the children growing up barefoot in Argentina. He saw the need. As of 2010, TOMS has shoes production units in 3 countries and needy children from 23 countries have benefitted from One for One. While Giving, TOMS take care of two factors while Giving: first - no child labor exists during making and distributing the shoes, and secondly - local and small shoes manufactures do not suffer economically. TOMS enters into partnerships all over the world, with the organizations working with a humanity approach.

As of September 2010, TOMS has helped with more than 1 million pairs of new shoes to the needy children all over the world. TOMS has received prestigious People’s Design Award from Smithsonian Institution’s the Cooper-Hewitt National Design Museum, and the Secretary of State’s 2009 Award for Corporate Excellence. Blake Mycoskie inspires to make Giving a part of everything we do and to make a better tomorrow. On TOMS appeals, all over the world, more than 250,000 people went without shoes in April 2010 to create awareness those millions of children who are growing barefoot in the world today and how people can change life of these children tomorrow by giving something today.

By Chaitanya Vyas

Faculty EDI

Strategic Thinking for Entrepreneurs

German philosopher Friedrich Wilhelm Nietzsche wrote, ‘He who has a why to live for can bear with almost any how.’ I would add ‘what’ in addition to why to live or what should be done apart from why it should be done; the ‘how’ part can be discovered surely. The question is about the direction; the question is all about what to do and what not to do; the question is about the strategic thinking in decision making. Entrepreneurs are portrayed as passionate people who relentlessly pursue their dream or whatever they believe in. Some literature also talks about the speed of doing things and making things happen. However, an entrepreneur will have to decide about the speed as well as direction. Higher speed in the wrong direction could be fatal for the new enterprise. Strategic thinking in terms of direction and what to do and what not to do takes the front seat over the speed. This is the point where the doing and being part of entrepreneurship should be combined with the thinking part of business.

The question is how do entrepreneurs develop the strategic thinking and work in the right direction. How entrepreneurs think about the platforms and not just the products? How entrepreneurs develop the sense of urgency or speed coupled with the sense of direction? Especially, during the start up phase of any enterprise it is often said, that entrepreneurs should not think about the strategic part of the business; whereas, in reality it is completely different. Limited resources make it imperative to make the most of whatever the entrepreneurs have. In such situation what matters is the direction- the strategic thinking.

Taking the base from Harvard Management Update ‘Corporate Strategy: A Manager’s Guide’, three questions for a strategist are: Where should we put our efforts (and why)? What do we bring to the table? And the third question, do our capabilities suit our position? These same three questions even entrepreneurs also need to ask themselves. Strategic thinking is not about the complexity. It is all about the clarity in thinking about what an entrepreneur is proposing to do and what he would abstain from doing. And if think about very basic but important matter like value creation process, the underlying strategic thinking needed is; who am I? (What is my value proposition?), for whom am I? (The segment or the beneficiaries) and why am I and not others? (Competition and differentiation). Even this basic strategic thinking also has potential to shape the other strategic part in the business.

Dr. Rajiv Joshi

Associate Sr. Faculty, EDI