The Life: Small businesses can learn a few tricks about operating a firm from large companies. Here are some tips.
Get those priorities right
Owners of small companies in the Emirates may feel they have too many priorities and claims on their attention as they try to expand their business. But they're not alone.
Executives at companies of all sizes suffer from common ailments while trying to grow their firms, and small business owners could learn a few management tricks by avoiding the perils of others. Sixty-four per cent of executives in one recent survey reported they had too many conflicting priorities, according to research from the consultancy Booz & Company. Some of the most significant challenges included allocating resources in a way that really supports a company's growth strategy, as 81 per cent of executives admitted their initiatives have led to waste at least some of the time.
When a business owner or executive develops a new strategy, they usually start by looking for places to grow. This may feel like the right thing to do, but it can be a misleading and even dangerous way to begin a strategic exercise, says Paul Leinwand and Cesare Mainardi, consultancy experts at Booz & Company who wrote about these findings in Harvard Business Review earlier this year.
Mr Leinwand and Mr Mainardi argue there are an infinite number of ways that a company can try to grow, and simply brainstorming them will immediately lead to a long list of initiatives. That will soon become an endless litany of priorities, and a large number of conflicting claims on attention. Interestingly, their research reveals that as an executive team's priority list grows, the company's revenue growth in fact declines relative to its peers.
The good news: the reverse is also true. Executives with the most focused set of one to three strategic priorities were the most likely to say they had achieved above-average revenue growth. The real question then that executives at firms of all sizes should be asking is: How can I get focused on the right initiatives for my company?
Small business owners can follow the example of successful executives at top-performing, larger companies by asking some basic questions about their own capabilities such as:
What are you great at doing now?
If you wanted to truly differentiate yourself from your competitors, what are the three to six most crucial capabilities that you can muster more effectively than everyone else and that would be truly worthy of your attention and resources?
How can I focus on the opportunities where my company can excel - and then reap the benefits of that discipline? This latter question is much better than simply asking, "How can I find more business opportunities?"
The answers to these kinds of questions can lead to an overarching framework for a business strategy that enables better judgement. Only then can a business owner decisively say "yes" or "no" to the vast number of opportunities around, with the confidence that they are picking initiatives that are not just appealing, but attainable. The key to success is choosing the opportunities that are best for a specific company, learning to turn down many that seem appealing on the surface - and may even represent huge monetary stakes - but do not offer a real chance to win.
*Paul Leinwand and Cesare Mainardi / Harvard Business Review and Reuters