A dangerous consequence of the common reference to ‘small and medium-sized enterprises’ (SME) is it implies that ‘small’ and ‘medium’ are more-or-less the same. They aren’t. A critical question in the life of any thriving small company is: can it successfully make the transition from an entrepreneurial business to an entrepreneurial organization?
Small enterprises often rely on passionate and committed people who will turn heaven-and-earth to get things done. Those heroic efforts are recognized and reinforced. And the stories become part of the company lore.
Yet depending on heroic efforts poses two problems: they aren’t efficient and they aren’t scalable. The ongoing need for heroic efforts indicates a lack of well-thought-out, documented and standardized processes. It’s tremendously costly, in terms of time, money and effort, to make up for process deficiencies with ad hoc people solutions. And as people move in, through and out of the business, there’s no guarantee that the next person will be as heroic as the last. The problems emerging from a lack of process increase exponentially as the business grows. Ultimately, they outstrip the capability of the business to solve them with heroic efforts.
To successfully transition to an entrepreneurial organization, a business needs to develop essential (but not excessive) processes that are effective, efficient and scalable. While there will always be a time and place for heroic efforts, they should be the exception. Heroic processes should be the rule.