Managing Your Success: How Big is Big Enough?

Your local restaurant is great. Then they open a second location and things seem steady, but little things start to suffer, service isn’t quite as good. By the 15th location, it’s just not the same place and you move on to new favorites.

So how big is big enough? How much is enough?

This is an important question to wrestle with, both as an entrepreneur, manager and professional with a career.

My wife has made me wrestle with this management question for longer than most because it’s a foundational principle in my wife’s limited arsenal of core business beliefs.

Michele, it turns out, was born a mature business person.

Early in our marriage I was a fancy MBA student and she was an “English” major working in “PR” for god’s sake! (What could she contribute to the discussion?) She had an important question: Why do so many businesses wreck themselves by growing too large?

My MBA-ish answer involved “share-holder value”, “retaining and rewarding high potential employees” and a number of other b-school staples.

“But what if I don’t care about those things?”  she asked.

At this point I usually disengaged, frustrated at her inability to grasp important business realities.

“Shellynomics”

As I’ve moved through my career in management and management education, I’ve increasingly begun to ascribe to what we refer to around the house as “Shellynomics” (Michele =  “Shelly”).

Shellynomics Principle 1: Some things are good the way they are. Grow too big and you wreck it.

Either product and service levels fall off or the entrepreneur loses focus and interest as the business morphs into something they aren’t interested in and “professional” management doesn’t have the vision of the founder. We’ve all seen some version of this.

Big Enough Businesses

Three examples I love that illustrate making a disciplined decision NOT to grow too much:

1 – Sandra Boynton was interviewed for a 2008 article in the NYT that suck with me.  

She has done VERY well, but has left money on the table in a number of significant ways. In summarizing why she hasn’t maximized all her revenue opportunities she says:

“I don’t do things differently to be different; I do what works for me,” she says. “To me, the commodity that we consistently overvalue is money, and what we undervalue is our precious and irreplaceable time. Though, of course, to the extent that money can save you time or make it easier to accomplish things, it’s a wonderful thing.”

She is certainly very commercially successful (>500MM cards sold, gold records etc.), but has drawn a line in her own career. Her scale has stayed at what she can do with limited staff from her personal office.

2 – We have a local bakery/bread store that does very well. There are several of them and the owner is quite successful. He’s decided that he won’t open any more, despite many offers to help him franchise them or grow under his ownership.

He’s declined those offers. Why? Because he makes more than he ever thought he would and likes running what he has. He still visits every store every day, can actually bake occasionally and has control. Growth would diminish both his quality of life and probably his quality of product. So he’s good where he is.

3 – Jason Fried and David Heinemeier Hansson make a similar point in their best-seller REWORK, which chronicles their principles in running 37Signals, a software development firm:

“Maybe the right size for your company is 5 people. Maybe it’s forty. Maybe it’s two hundred. Or maybe it’s just you and a laptop. Don’t make assumptions about how big you should be ahead of time. Grow slow and see what feels right – premature hiring is the death of many companies. And avoid growth spurts too – they can cause you to skip right over your appropriate size….Don’t be insecure about aiming to be a small business. Anyone who runs a business that’s sustainable and profitable, whether it’s big or small, should be proud.” (pp 22-3)

Big Enough Careers

I think the same theme applies to careers. At certain points in a successful career, you have clear inflection or decision points. Think of it as rising mountain ranges. I’ve scaled this hill and have reached a nice plateau. But I can see other mountains rising above me. How hard do I want to climb another slope to the next level and what am I willing to give up?

What’s Right for You?

So how can we think this through? Ask yourself the following questions and be honest with yourself:

1 – Why did I get into this (start-up, career, job, company etc.)?

2 – Am I getting what I thought I would?

3 – Am I happy with things the way they are now?

4 – If I make change X, is whatever gain worth the trade-off?

It takes discipline and self-awareness to both recognize that you like where you are and not succumb to peer pressure, ego and other impulses to make things bigger just because you can.

We (me and Shellynomics) are NOT arguing that nothing should grow in some fit of localism. That’s dumb. Both Michele and I value and shop at many national chains (Target, McDonald’s, Starbucks, Amazon etc.) and think they’re great for what they are. (Sometime I feel like we should have Target direct deposit from my paycheck!)

But Target (founded by the Dayton’s department store empire) was never a small intimate retailer. It was built to be big. And even they had to hit the breaks with growing pains in the 80’s. But they are of “appropriate” scale given their goals.

We are arguing that everything doesn’t need to get big!  Be your own judge in your own life and career.

9 thoughts on “Managing Your Success: How Big is Big Enough?

  1. Hey Phil,

    Great thoughts! Just thought that I’d let you know that Target has a credit card or debit card that will save you 5% on all purchases.

    Hope all is well,
    Josh

  2. Great post Phil! I especially like the quote: “It takes discipline and self-awareness to both recognize that you like where you are and not succumb to peer pressure, ego and other impulses to make things bigger just because you can.”

    This touches on the authenticity piece of career development, which is one of my biggest passions. Bigger doesn’t always mean better for everyone.

    This topic reminds me of Daniel Gilbert’s book, Stumbling on Happiness. It talks about our striking inability to gauge what will make us happiest.

    Also, Your wife sounds brilliant.
    ABJ

    • The biggest one is “money isn’t money until it’s cash in your hand!”She gets frustrated by all the talk of profits and losses “on paper”. In her mind “on paper” isn’t real.

      As a business prson I’m torn. I partly agree, but it doesn’t matter what I think. It’s not caled “phil-onomics” 🙂

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