Everybody who works with or at different companies will recognize the phenomenon but it strikes me every time again. Why do changes and improvements happen so much faster and swifter at smaller companies than at larger ones? With only an evening or afternoon of support a start-up can achieve significant progress in structuring a development or production process while a seemingly minimal improvement at a multinational can easily take a couple of months to implement. In between are the medium sized companies where a project of a couple of weeks can induce a significant and lasting improvement.
Why do start-ups and smaller companies obtain improvements so much faster than larger companies and what can smaller companies learn from the larger ones?
By nature a start-up is easy to oversee: The entrepreneur has a clear idea to bring a new product to market, has gathered the right people and is eager to find and retain new customers to build a good and solid new company.
This in striking contrast to the situation at a larger company. There one finds a number of offices and branches, each with its own management en individual goals. On top large companies have many, often critical, customers with clear requirements and expectations on the products and services they will receive. The consequence is that the impact of potential changes is much larger and will be evaluated much more closely. Little wonder that changes or improvements are complicated and take long time to define and implement. On the positive side a large company is often able to find and implement the best possible solution for a given challenge.
Can the clarity and transparency of a small company also be achieved at a larger company without losing the sharpness required and thereby achieve a faster pace in improvements or changes?
Similar to a start-up also a department or a branch of a large company has a clear goal to achieve, although it sometimes takes a bit more work to find out. When looking for goals of parts of a large company it is good to keep in mind that the goal of one department is often just a means for another. An example is the logistics department for a production plant: efficient supply of goods and materials is a clear goal for logistics but just a step in the production process. On top of this having a clear goal also makes it possible to easily identify the stakeholders and possibly a need for improvement.
A good understanding of the objectives of the various processes within a company opens another possibility to keep a fast pace of improvements. By setting clear process objectives for separate parts of the entire process not all details need to be analyzed immediately and separate improvement targets can be set for underlying processes. Smart usage of objectives of underlying processes enables killing two birds with one stone: focus on the main issues in the main process (and don’t get distracted by details that belong to underlying processes) and limit the stakeholders involved to those being part of the main process.
This shows that, by having a close look at the overall and underlying objectives and not focus too early on too many details, it is possible to create enthusiasm and a high pace of improvement, also in a large company. Indeed the individual steps a large organization can take are smaller than a small one but the effect and impact of the changes are generally much bigger.