Businesses are currently faced with unprecedented change. Every change — especially those related to technology and business model — brings more and faster change. Change changes the nature of change. Each change creates new opportunities, and each change shuts the door on previous growth opportunities. No one is safe — especially not mid-sized businesses.
Although large businesses are often criticized for their lack of agility, the truth is large businesses comprise multiple, smaller business units. These business units often operate with an exemplary entrepreneurial flare and with the full financial, operational and strategic support of their mothership.
As change happens, not only do they detect it, they can actually do something about it. In fact, in many instances, they are able to detect emerging changes long before smaller firms because of their ability to invest in key account management strategies. These strategies enable them to embed themselves deep within their key customers' processes and value propositions.
As the world changes for their customers, they are in the advantageous position to quickly detect these changes and understand what they must do to remain relevant. They also have the financial resources to make whatever changes are deemed necessary.
At the other end of the scale are small businesses. They often can't afford key account management strategies, and they don't have the financial, operational or strategic backing of a mothership. But what they do have is passion.
This passion gives them two major advantages:
1. Everyone loves to work with people who are passionate about what they do. Consequently, customers will likely share emerging challenges in order to tap into the seemingly boundless pool of creativity and innovation, which is born of passion.
2. Small businesses have little in the way of overhead and infrastructure. Consequently, they are less committed to these infrastructure investments. If they see where their overhead is no longer adding value, it's much easier for them to reduce or drop it and invest in new resources.
In such a fast-changing world, the firms that will have the most difficulty staying afloat will be mid-sized businesses. These businesses have learned how to scale through systematization.
While systematization is necessary for profitability, its hidden dangers are the natural tendency to look to the past for validation of profit models, to fight for the status quo and the internal perks it provides its leaders, and to ignore any signals from the future that might indicate the current infrastructure is losing value.
Mid-sized firms often also lack passion from their employees. The drive and hunger that is palpable in small firms gets diluted with the need for dispassionate, professional management and the need to fill headcount.
Finally, mid-sized firms tend to be more lethargic than their much larger counterparts. This is often because they remain product-focused. Their desire to protect their infrastructure investments and their unwillingness to adapt to specific customer needs leads to a desire to keep doing what has always been done. Outwardly, they appear much smaller than large multinationals, but in reality, the business units of the multinationals are actually smaller and far more nimble than mid-sized firms.
The leaders of mid-sized firms must figure out how they can become truly customer-centric. In doing so, they must learn to separate the systematic, legacy parts of their business from those parts of the business that are delivering new value based on emerging client priorities.
Like their larger counterparts, they must make the investment in key account management strategies, and the associated infrastructure changes and skills development in their people. Getting crystal clear on what their key clients need, how those needs are changing and how they add value to these accounts is the only way mid-sized companies can survive the coming commoditization tsunami.
