What Small Business Owners Can Learn From the Big Guys
At least once a week a small business owner will ask me what I do as a professional business advisor. When I’ve completed the list of my “deliverables” – profit optimization software, executive coaching, strategic planning, etc. — the response is often something like: “It would be great if I could get some help like that, but I’m sure we can’t afford it.”
The truth is, they cannot afford NOT to. Every client engagement I have ever been on involves, to a large extent, working with one leader at a time and one team at a time. So, the cost is pretty much scaled to the size of the organization.
The smaller the team the less time it takes. In fact, return on investment, measured as a percentage increase in profits, is often greater with a small firm than a multi-billion dollar multi-national corporation. Most will agree that a small- to medium-sized enterprise (SME) also can exercise its built in advantage of flexibility, being able to change course more quickly than a multi-layered firm.
I have worked with dozens of SMEs and dozens of the world’s largest have surprisingly similar types of opportunities to grow. Being good, and even great, regardless of the size of the enterprise, always comes down to one primary concept. Whoever has leadership responsibility must take care of their constituents.
As small business owners it is essential to think not just of customer relationships. They are hugely important. But think broader; think about Constituent Relationship Management. Some relate to the term “stakeholders” for this more inclusive set of interests. The label is unimportant. The principle is vital. Time invested taking care of constituents will produce a well-oiled machine providing the best-possible performance.
Regardless of the size of the enterprise there are 5 constituencies to provide for, they must all profit from your interactions:
- Communities
- Customers
- Suppliers
- Employees
- Owners
Unlike machines that have components limited to playing their respective roles, a team’s constituents participate voluntarily, and they do so only as long as they profit sufficiently to justify their involvement.
Consider the perspective of each constituent. How would they answer the following questions about you as a part of their constituency?
- Do they trust me to be fair?
- Do they believe that I care if they succeed or fail?
- Do they believe it will be profitable to do business with me?
- Do they believe that when business gets difficult I will work with them to help them if I can?
If the answer to any of these considerations is no, you need to resolve that relationship issue to succeed. If you don’t know the answer then you have a significant opportunity just by realizing there is a potential problem. Take action by meeting with any or all of your constituents – preferably on their terms – to find out how they are doing. Learn how they perceive you and your interests in them. Recognize that you need them as much as they need you, if not more.
Many big companies understand these truths. They become solid institutions because they are perceived to be great to work with, to work for, to have ownership in and to have in our communities. Big firms usually have people working with or for each of their key constituencies to measure and monitor the relationship, which smaller firms may not have.
But regardless of the size of your enterprise, taking time to cultivate each of your constituencies will yield the best-possible opportunity for growth and success.
It doesn’t matter whether you are a one-person enterprise or a Fortune 100 company, for-profit or non-profit, being successful is ultimately driven by your efforts and commitment to your constituents. This commitment usually develops best person-to-person or person-to-small-group, rather than “entity” to “entity.” Getting to know your constituency will pay off sooner than you might imagine.
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As the owner of a small business tasked with relating to all of our constituencies it often feels like I am “herding cats.” Viewing those entities important to the success of my business as just five audiences does help provide focus. In fact, I think today I will retain a good PR firm to help cultivate a few of our “communities”. Thanks.