As business leaders, we often grapple with the question: Does size really matter? Is bigger really better? Or should we focus on quality over quantity? The allure of empire-building and category dominance can be strong, but the increasing number of layoffs from large-scale companies like Meta, Amazon, and Tesla raises the question: do companies need all of these employees in the first place if the operation can be done successfully without them? Does the size of a business matter when it comes to its success?
For any enterprise, growth is essential. We must understand that businesses are not maintained – they either grow or fall into decline. Growth is the only way to prevent irrelevance and obsolescence, and to attract and retain top talent. It is also the most certain path to sustainability.
However, businesses must exercise caution with this growth mindset. Growth must be healthy and sustainable, not growth for the sake of growth. It must be guided by design, purpose, and intent, and focused on the right areas at the right times. Growth that is not well-planned or executed can lead to corporate ruin.
Let’s dive further into the “Bigger Is Better” Business Model.
The “Bigger is Better” model is based on the premise that a larger company is more likely to be successful than a smaller one. There are several advantages to this approach. Firstly, larger companies are often able to offer a wider range of products or services, which can attract a broader customer base. They may also have greater access to resources and be able to invest more heavily in research and development, allowing them to stay ahead of the competition. Additionally, the size and reputation of larger companies can convey a sense of stability and legitimacy to clients or employers over smaller companies.
There are also several disadvantages to this “Bigger is Better” model. One of the main challenges is managing the size of the workforce. A large company may have multiple departments and hierarchies, which can lead to bureaucratic inefficiencies and slow decision-making processes. And as we have witnessed over the last year, larger companies may be more vulnerable to economic downturns, as they have more expenses and are less agile than smaller companies. Hence having to lay off 10 – 15% of their workforce to stay afloat.
The grand takeaway here is that size alone is not an indicator of success. Size must add value, not dilute it. It should never outpace capability, and should never be a substitute for quality. The myth of bigger is better is just that – a myth. Better is always better. When size alone is prized, it can be used as a justification for shortfalls in other areas. We must remember that stagnant leadership cannot sustain a growing company.
Stay tuned next week to learn more.