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If the rules need to be bent, broken or completely rewritten to move forward, or to make the most of limited resources – then SMEs are more inclined to create new rules. If the current rules don’t suit, then move the goalposts – Large businesses focus on doing the best they can within the accepted ‘rules’ of the market they operate in. Encourage risk taking – finding a better balance between defensive and offensive behaviour – smaller companies may be more focused on breakthroughs rather than incremental change, and managers in larger corporations are more concerned about loss avoidance or avoidance of failure (as this would negatively impact their career).Ĥ. For businesses that can’t ‘just’ strip out layers – skunkworks sidestep this issue by creating this more agile environment outside of the parent businessģ. By stripping out layers of management it aims to become more agile. In streamlining its management, Ikea is looking to address a slow and bureaucratic decision-making process. Think fast – make key decisions more quickly: Many large businesses are characterised by silos and bureaucracy … needing time to make decisions, which often means stifling or slowing down key decision making. Huge companies can still feel authentic and approachable if they allow their employees – the ones who are genuinely local to their customers – to express themselves and tailor how they deliver, present and manage their products or services.Ģ. Zappos famously empowers its employees to deliver best in class customer service. “it is a daily quest for every Zapponian to “WOW” our customers in new and wonderful ways”. Zappos is a great example of a $2bn business acting like a small company when it comes to interacting with its customers. Customers are precious: treat them as individuals and with the mindset that your future existence depends on keeping each and every one of them happy. So what can big companies learn from SMEs? Here are a few thoughts …ġ. ‘Thinking Small’ may well be the next corporate strategy! They must actually be able to act small too. Big companies are inherently complex beasts, but their size doesn’t have to lead to sclerosis! Big companies may look enviously at some of the traits of smaller companies – their agility, flexibility and focus – but they can’t just pretend to be small and nimble. So often we talk about what SMEs can learn from their larger brethren, but actually this should be a two-way street. It’s redesign was intended to make Ikea more simple and efficient, shorten the decision-making process and make it more agile. Ingka’s management realised that it had evolved a structure that made it harder to make quick decisions close to the customer. It had become too slow and bureaucratic. Ingka Group, Ikea’s parent company, is a behemoth … employing 160,000 people across 30 countries. The skunkworks is a great example of a big company trying to think like an SME.Īt the end of last year Ikea announced a plan to streamline its management to help rediscover its entrepreneurial spirit. Other famous skunkworks have included the Apple lab of about 50 people – behind the Good Earth Restaurant in Cupertino – established by Steve Jobs to develop the Mac computer. The term has been generalized to apply to high-priority R&D projects at large organizations which feature a small team removed from the normal working environment and given freedom from management constraints.
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The term originated during World War II when the P-80 Shooting Star was designed by Lockheed’s Advanced Development Projects Division in Burbank, California. You’re probably familiar with the concept of a ‘skunkworks’ … an “environment that is intended to help a small group of individuals design a new idea by escaping routine organizational procedures”.