Will your company get better by being bigger?

There is this idea in business that getting bigger means you have more muscle, more reach, more money, and that that will automatically make everything better. It will help you solve your problems. If you can't solve a problem, it's because you're not big enough. 

At the same time, when pushed a little on this assumption, most leaders have the sense that that's simply not true. We must debunk this myth in our workplaces. It's the first step towards solving problems, instead of pushing them into the future under the assumption that, if we are bigger, they will go away.

Exercise: Will bigger make this company better?

We talked to a co-founder of a startup last week who was unsure what an appropriate size for his company would be. He wanted to define one, but he kept ending up at "it should be as big as possible, because we are doing good things.

That's a classic starting point. We ran this exercise with him to help him get closer.

It's three rounds of questions, and you should answer them without researching; answer on the spot.

Round 1 - The Primers

1. Will Lakrids By Bülow be a better company now that its founder, Johan Bülow, has sold his last shares and it's 100% owned by a capital fund? Be specific, when you say better for whom? Be even more specific, better? (choose a company that people know where you work)
2. Did it make Oreo a better company to get acquired by Mondelez and become bigger? Have in mind the critiques of shrinkflation and watering down the recipe? (most know Oreo)
3. Did it make the small, 100+ year old crafts brewery, Anchor Brewing, a better company to be sold to the Japanese giant, Sapporo, and become part of something bigger? Have in mind that it got shut down and sold to someone else only a few years after Sapporo bought it.

Round 2: Questions for you

1. Will it make your company better to have more people? Let's say you are now 50. Would you be better at 100, 500, or 1,000? What would you gain, and would you have to give up, if you grew to that size?
2. Will it make your company better to be in more cities or countries? Let's say you are in one country now. What if you expanded into five other countries? What would you gain, and what would you have to give up, if you grew to that size? 
3. Will it make your company better to sell more units or serve more people? Let's say you sell 10,000 units per year now. What if you grew to 50,000 or 100,000? What would you gain, and what would you have to give up to grow to that size?
4. Could you serve the same need for the same amount of people with less resources than you do today, if you change your products or service, or if you changed how your customers used them?

The key here is to set specific numbers for your size and growth, go with your gut feel, and observe your own reactions to them.

Round 3: Same questions, new assumptions

Now that you have answered those questions, most likely under conventional assumptions about business. Let's challenge those, and see how you respond.

Assumption 1: In conventional terms, it's believed we live in a demand-driven economy. Companies do as the customers demand. That's not entirely true. We live just as much in a supply-driven economy. The accessibility of products and services shapes demand (as several studies show). How does that change your answer? 

Assumption 2: In conventional terms, it's believed you can only scale impact by growing. That's not true. You can, in fact, scale your impact more effectively by applying more scaling impact strategies. In other words, if you are only scaling impact by growth, you are probably doing something wrong. Learn more in chapters 11 and 12 in The Edge Playbook:  https://www.postgrowthguide.com/offers/hJDvo3vg/checkout

Assumption 3: In conventional terms, it's go big or go home (because of assumptions 1 and 2). That's not true. Pursuing more and more growth is risky and costly - hence the go big or go home. You can reverse that, and instead of chasing more, try to protect what you have. In other words, you can stay small and stay a little longer.

Assumption 4: In conventional terms, well-being for employees is not that important. You can push them, manage them, and you can get new ones if they leave or get stressed. But of course, well-being matters, and staying small means more influence on your work, being part of a concrete community, and easier-to-see results; that's fundamental for well-being.

Now that we have changed these four assumptions, how do you answer those questions from Round 2?

If you decide to do this exercise yourself, let us know how it goes.