Blog post

The Achilles Heel of Larger Organizations

By Hank Barnes | September 14, 2021 | 2 Comments

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In the technology industry, large companies have an unfair advantage.  With much of the market composed of risk averse, cautious companies, the big choice is often viewed as the safe choice.

That doesn’t mean smaller companies can’t win.  They just need to focus on the right opportunities with a differentiated approach to breakthrough.  It happens a lot.  But there are also lots of misses.  And in those misses, the large orgs strengthen their position.

But, I believe that most large organizations have a point of weakness that can be attacked.  Success here may not be a truly devasting blow for the larger organization, but it can be a significant win for the smaller company.

That point of weakness.   Organizational silliness.  (Note: There is probably a better name for it, but this is what I prefer to call it).

Organizational silliness occurs when a company grows large enough to have multiple divisions–that have their own targets.   Often times, these divisions serve the same set of customers–sometimes with similar solutions and capabilities.   Or, they have very complementary capabilities that together would deliver more value for those customers.

Source: Photo by Sandro Schuh on Unsplash

But that is where things break down.   While seeming to have a powerful complete solution, internally it doesn’t work that way.  The divisions don’t talk.  There are different sales teams.   Leaders spend time trying to figure out how to constrain the other division from taking budget from “their customers.”   Divisions worry about other divisions cannibalizing their revenues.  Opportunities are not pursued because of concerns of “bad behavior” in the other group.  And the list could go on and on.

There are lots of reasons brought up for these issues.  Scale. Focus. Revenue Preservation.  You name it.

The biggest loser in these situations is the customer.   They end up with less potential value than they would like and an awkward relationship that doesn’t make sense to them.

This contributes to the next big loser–the large org.   Even as they (often) continue to grow, they are underperforming potential and damaging customer relationships.

The winners–smaller organizations that recognize these situations and go on the offensive.   They go to these customers and highlight the silliness they are forced to endure in their large vendor relationships.  They look for specific solution gaps caused by the silliness and focus their energies there.  Done right, they create a defendable, growing space in the market.

How can you spot the silliness?  Work to understand the organizational structures and divisions of your larger competitors.   Determine if they have an integrated sales force or if they have more distinct teams.    Then look at the things you are worried about competitively from them to see if the aren’t as strong as you imagined, given the silliness.

Use that to create a better, less frustrating option for your customers.   That’s not silly.  That’s good business.

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2 Comments

  • greg says:

    Hi Hank,

    i think ‘organizational silliness’ can also be summed up as ‘inertia’ where the simplest of tasks takes a lot longer to reach the internal ‘consensus’ before an offering is put out to the customer and marketed to an outside audience, which also includes their peer competition or oligopoly in most cases.

    for a smaller organization to succeed i also think what is needed is finding the weak spot that is also pain point for the customer. neglected and glossed over by the large organization, customer’s pain points that require immediate relief can be turned into enduring opportunities that can make the small organizations to grow that is only possible when customer real needs are satisfied.

    or at least this is what i could come up with on a Friday night.

    Cheers,
    greg

    • Hank Barnes says:

      Agree with all of this. Inertia, Myopia, Insular thinking, and pure arrogance are all risk factors (and opportunities to exploit when done through the eyes of value to a customer). Thanks for commenting- even on a Gartner blog 😉