Dansk
It doesn't always matter whether your business is big or small. What matters is that you know what you want, can and do.
For many owner-managed businesses, the question of size often looms large.
In many small businesses, the owners typically dream that the business can grow bigger.
Conversely, many owner-managers of large companies dream of the days when the company was smaller and more manageable.
The issue of size has also spread to academic circles. For example, in a commentary in Børsen on February 24, 2023, Aarhus University professor Christian Bjørnskov concluded
"The bottom line is that size has hardly ever been an advantage and is increasingly becoming a disadvantage and a sign of failing productivity."
Big muscles can be a prerequisite for progress. But if you don't know how to use them, they quickly become dead weight.
As a former manager in large companies and current owner of my own strategy tech company, I dare to conclude that the discussion about size - also in this context - quickly becomes rather complicated. There is not necessarily one "sweet spot".
I have seen large companies spend tons of resources on endless internal discussions about priorities, responsibilities, knowledge sharing and optimization of processes. And I've seen how large management teams and executives have been completely unable to answer the questions: Why do we do what we do and how does it fit into the company's strategy? In such cases, size itself can be an obstacle.
Conversely, I have also seen owner-managers of smaller businesses struggle as the bank overdraft just went up and up. Where everything from contracts to cash-flow has been a mess without the owner-manager asking himself the question: What is my goal and our purpose? In such a case, size can also be an issue.
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Christian Bjørnskov is right to the extent that communication and development in large companies is more difficult or complex than in small ones. On the other hand, large companies also have the muscle to handle the complexity, if they are skilled enough.
The owner-manager of the small business doesn't have that - and that adds a different kind of complexity. Just ask your local craftsman whether it's easy to handle VAT accounts, leases, IT, purchasing, marketing, tenders, social media, recruitment and collective labour agreement rules on your own - all while working overtime.
The point is that size in itself does not necessarily determine success - or the opposite, for that matter. What matters is whether you, as a senior manager, are clear about what you want, can and do.
Big muscles can be a prerequisite for progress. But if you don't know how to use them, they quickly become dead weight.
Small can be good if you need to be able to switch tracks quickly and are highly specialized. But if lack of volume prevents you from delivering optimally, a larger organization may be necessary.
Therefore, size is not an end in itself, but a means to achieve your goals. And if you don't know what your goals are, size doesn't help!
This column was published in Jyllands-Posten Finans and in Jyllands-Posten, Erhverv on March 29, 2023.
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