It has become more and more evident over decades that in the fight between big vs fast companies, speed and agility have contributed significantly to organizational success. Yes, it is not the only factor that determines business competency but is definitely one of the factors that can be used as a competitive tool in business.
Additionally, it has been observed that speed outdoes the size of the organization. Companies that have become big but not maintained their innovation speed on a consistent basis have sunk.
We will discuss certain cases of how speed was used to defeat giants in the industry.
In Malcolm Gladwell’s book “David and Goliath”, the dilemma of big vs fast is explained as the competitive advantage of the underdog. David, an athletic and fast teenager battles Goliath, a strong, extremely large unchallenged giant.
Previously, swords were used in fights but David brought a sling to the fight and won. The author explains how the sling depicts new technology and David’s speed aided in his victory.
Another example of the concept is the 1980 Olympic Finals of Ice Hockey between the USA and USSR; where the USA’s young team defeated the previously undefeated Russian team using new tactics, speed and improvisation.
One of the best examples of big vs fast companies is that of Blockbuster and Netflix. Netflix revolutionalized the industry by being a small start-up that eventually overtook Blockbuster. They did this with speed, agility and innovation.
Blockbuster was a brick and mortar company that started in 1985 which grew from one store in Texas to three thousand stores in 1992. Netflix started as an online service for movie rentals in 1997.
Netflix brought change to the business model that blockbuster had; no late charges were required. Instead, a monthly subscription fee was to be paid. Netflix even approached blockbuster to possibly handle the online side of their business, an offer which was declined by Blockbuster as they were of the opinion that Netflix was too small a player.
Blockbuster was massive with a high brand value, financial strength. Netflix, on the other hand, was not very well know but managed to grow their market share due of their fast changing tactics, innovation and agility.
Eventually, blockbuster had to try and reach upto their level which they were not able to achieve and ended up filing for bankruptcy in 2010 with Netflix being ten times their worth in 2014.
Today, Netflix continues to innovate. It has emerged as a streaming platform that curates content to compete with giants in the industry such as Disney, Universal, 20th Century Fox etc.
Another great example of big vs fast companies is Siebel and Salesforce. Siebel was one of the largest CRM software companies in the world. It got acquired by oracle in 2005 at $6 billion dollars. At the time their market share is 20%. They had a particular business model that was geared toward the enterprise.
Salesforce entered the market with flexible pricing and configurations, thus changing the way business software was sold. In 2005, the revenue of Salesforce was $176 million dollars while Siebel’s revenue was $1.5 billion dollars.
In 2019, Siebel’s division of Oracle revenue $160 mil dollars and 0.5% market share. It became 1/10th of its size. In the same period, Salesforce grew to have a revenue of $13 billion dollars.
Salesforce is the David that became a platform company that provided a service and it continues to innovate even today. They were fast, agile, and defined the market instead of just reacting to it while Siebel is the giant who fell.
The chairman of Jet Airways, Mr. Naresh Goel had mentioned that low-cost carriers would not be able to compete with Jet Airways as they have their own markets.
Indigo changed the game with innovation of their
They made sure they were fast, they would employ new tactics very quickly.
The moral here is that the small companies were able to beat very large ones using innovation, adaptability, and speed.
Amazon emerged as a giant but are still constantly changing themselves. They keep growing, expanding into different areas, innovating, and creating new spaces.
Amazon Prime, for example, the first version of Prime was created at the end of 2004; a month and a half later, It went live on the 2nd of February, 2005.
Their business sense is very fast as they adapt quickly and create new models. They are building their brand’s ecosystem.
Apple continually challenged the status quo. Their slogan “think different” redefined the speed and pace at which a business could alter themselves. When Apple was the stock market’s favourite, Steve Jobs said that Apple is the largest startup.
Their speed is truly brilliant. An example of it is the iPod which was shipped within nine and a half months of its initiation.
The moral here is that size does not matter. No matter how big your company gets, you should always be fast.
Those companies that have reached the market fast have succeeded in grasping a chunk of the market share.
The sheer size of inventory and the shared economy model drove Airbnb to be one of the most successful companies.
Its listings are more than that of the four mega hotel chains in the world combined. With the pace at which Airbnb is growing, it will soon catch up with Marriot which is undefeated due to its acquisition of the Starwood properties.
Airbnb has an unorthodox business model. Speed and adaptability are its strong suits.
Jio was extremely fast when it entered the market. Competitors like Airtel and Idea were struggling to keep up. Now that Jio acquired a significant market share, they have given some space to let Airtel and Idea catch up.
Jio continues to innovate at a fast pace and has acquired many startups and integrated them into Jio platforms.
It’s important to understand that those companies that become large and stop innovating or adapting will definitely fall especially in this day and age. Being fast is important but that is different from being hasty which is counter-productive.
Consumers have grown to crave instant gratification and this is what businesses are catering to. Speed is a very useful tool in leveraging this desire for instant gratification and creating a competitive advantage in the market.
The understanding of big vs fast companies has been explained very well in Jason Jenning’s book, “It’s Not the Big That Eat the Small…It’s the Fast That Eat the Slow.”
Using speed has therefore become essential. There are several principles of creating a successful advantage using speed as the winner of the fight between big vs fast companies, they are:
In understanding big vs fast companies, proper anticipation and spotting of trends is important. To anticipate properly, successful communication and empathy are essential. Understanding the target market and recognizing trends is very helpful so as to convert intuition into a product.
For example, Fabian Manson, the former CEO of H&M fills the gap in every matter of financial performance. His unconventional business model involved the designers to sit in bars and pubs, clubs, observe rock concerts, observe parents with their kids, attend sporting events and look for new combinations rather than attend fashion shows.
Delving into the minds of the target market and not only knowing what they want but liking what they like is essential; after this, speed is a result of fast thinking.
Failures have to be anticipated so as to come up with mechanisms to make sure they are controlled and have minimal impact on the working of the organization. This increases the chances of success. Goals should not be overestimated and resources should not be underestimated.
When failures occur, which they definitely will, learning from them is important. Otherwise, you will get stuck in a cycle of repeated mistakes.
Setbacks are inevitable. Success comes from the lessons taught by setbacks.
In the big vs fast companies feud, fast beats the bureaucracy. A lot of potentially great ideas suffer fates of being hijacked, the idea giver faces discouragement or someone who feels threatened decides that the idea has no merit. This greatly affects the direction and speed of working.
Big ideas innovation comes from the top because that’s where the resource is and that’s where the power to say yes existsEVELYN DILSAVER, SENIOR VP OF CHARLES SHWAB
A good company’s leaders have to ensure that their ego is put aside for ideas and inspiration to arrive from anywhere in the organization. An organization needs to be collaborative, not authoritarian. Human capital defines a company; fast thinking cannot be achieved if people’s voices are not heard.
Decisions cannot be centralized, they need to made by the departments concerned. There cannot be paralysis in the analysis of decisions. Bureaucratic structures are unnecessary and need to be destroyed as quickly and efficiently as possible. Waiting for consensus on every decision slows down the organization.
Time, effort, and energy is required to understand the usage of the right tools. This is ultimately worth it. Digital tools like AI, RBA, and low-code no-code are very helpful.
Owning and exploiting your competitive advantage can also be very beneficial so as to not rely on others.
For example, in 1979, Charles Shwab purchased the beta system for $5,00,000 which was equal to the net worth of the entire company at the time. Post this, the software was needed. Soon, Shwab had an in-house tech team creating products. Some were blunders, but others were big successes. In 1996, e. Shwab was launched which expected 25000 customers in the first year, they got that in a month.
Besides this, it is important to ask questions to understand the motives, the best and worse case scenarios, every outcome should be considered to make decisions. Frequently shuffle portfolios to enable fresh perspectives. Stepping out of comfort zones is important to keep people on their toes.
In big vs fast companies, action has to be taken to generate results. Get work done instead of wondering what would happen if you got work done. This is possible if the same sentiment is shared throughout the organization; speed is a byproduct of motivation to achieve goals.
Invite other fast people to join your crusade, your vision rather than just offering jobs. This will ensure their retention. A shared cause with a crusade is the reason for existence. The need for speed, fast market, and the crusade becomes a way of life for the organization.
For example, Hotmail crusade was to revolutionize or democratize communications.
Vendors and suppliers should also be made to move fast. For example, Zara’s success as a retail fashion brand is largely due to its quick supply chains.
Consistency in your pace is imperative. Keep up with new methodologies. Prove the math and keep it as a template for success. Companies whether big or not, need to use their resources wisely irrespective of their operations. Do not be cheap, be ruthless.
A cynic knows the price of everything and the value of nothing.OSCAR WILDE
Maintain the momentum, do not be wasteful. Learn to be opportunistic. Institutionalisation of innovation involves being be consistently fast i.e. not stopping the flow of ideas.
Measure what is important i.e. activity. Do not be short sighted. Be fast keeping in mind the long term goals.
In companies, technologies can be leveraged to provide an advantage. Competition is always going to be around, do not focus too strongly on their successes, the same time can be spent on making your business faster.
In the same breath, learn to stay beneath the radar. Collectively, operations should not be spoken about or it could lead to unnecessary competitive speed bumps. Do not give your competitors a chance to get an upper hand.
Do not complicate your business proposition. Be fast but keep it straightforward. Keep it simple.
For example, the H&M designers makes designs and within 2 months, its in stores.
Everything needs to be constantly reassessed.
Create, publish, and use guiding principles as a vital decision-making tool. Fast thinkers operate in the best interests of the company need principles.
To sustain speed, companies need to make an effort to stay flexible financially.
A pre-requisite to being fast is being real. While you can put on a show for your customers and even your employees, make sure to accept stressful situations and actively work to solve them.
Big vs fast companies can be big and fast too. Learn to adapt fast or perish. Improvising and overcoming challenges is crucial. Sometimes, things do not go according to plan. Day to day business is like walking through a minefield. You must learn to be more nimble.
Make sure to build capable people to deal with situation changes, hire attitudes over skills. Skills can be developed but attitude is deeper than that. It is important to be genuine and persevere through failures and mistakes and always get back up. Resilience is everything.