Can Small Business Concepts Work in Big Corporations?

I read an article in Forbes on-line today by Matt Symonds asking “Can Entrepreneurship be Taught to Big Business”? It seems that several business schools are trying to find a way to develop a term called “intrapreneurship”, or corporate entrepreneurship.

They see the need to drive small business innovation and flexibility to large corporations. While I certainly see the need to do so I will never believe that most large corporations will ever embrace those qualities with anything other than “lip service”.

Large companies have basically insulated themselves from their customers through cost cutting, and outsourcing. When was the last time you called a large company with an issue and got a live person on the phone without going through a series of maddening prompts? I had an issue with a credit card charge a few months back and was actually given the option of paying a fee for the opportunity to talk to a customer service representative. I have to admit I opted out.

The issues with large corporations go much deeper than the obvious however; the issues are fed by fear of liability, seemingly lack of trust of employees and turf management.

I’ve had experiences with numerous large companies over the years and am constantly amazed that many remain viable.

One in particular that I’m familiar with is an excellent example of what I’m talking about. It’s a large Fortune 100 company in a highly regulated market. Product sales were historically driven by high quality and name recognition. As is common in most industries new competitors are entering the market putting cost pressures on the market leader.

They have responded by:

– Increasing sales goals on field reps, while:
– Cutting costs in inventory for sale
– Cutting levels of service personnel and spare parts
– Cutting billing and support personnel
– Eliminating training and customer education
– Centralizing all quotes and pricing delegations to headquarters functions, while maintaining almost no customer contact from that level.

In short there are conflicting goals and little or no customer contact beyond the sales reps in the field. To me this is a recipe for failure.

Large corporations whether through fear of litigation or lack of trust have layers of management and hundreds if not thousands of policies and procedures aimed at standardizing everything, where is the room for innovation in this environment?

Many years ago I worked at a senior level of a then Fortune 500 company. The saying there was “nails that stick out get hammered down”. I fear that’s as true today as it was then, maybe just more eloquently put.

I agree that lack of innovation, flexibility, poor communications are issues that are making large companies less competitive and vulnerable to smaller faster businesses. I also think that every company runs the risk of growing to a point that it loses the things that made it successful in the first place.

Only the most effective leadership can address these issues and prevent them or turn them around. That leadership ability must permeate through all levels of the organization. In a small business there are less layers to filter and interpret the message. Large corporations have many more opportunities to block out even the most effective focus and direction.

Until business schools can understand and resolve these issues which are based in human nature I do not see small business concepts being embraced by most corporations.