A famous movie ran a tagline: “Size Does Matter.” It’s a nice slogan for a fantasy movie whose main star is a green-colored, destructive, prehistoric sea monster awakened and empowered by nuclear radiation. But if this slogan were to be used as a business philosophy today, it may not be a good thing.
During my garments manufacturing days (a long time ago in a galaxy far away), business owners were doing “humble bragging.” The term did not exist yet, but the practice was prevalent. When business owners meet, many feign complaining, disguise the bragging and say, “Do you know the headaches I have because of the new factories I have to build and the thousands of employees I have to maintain?” Now that is humble bragging. Young people think they invented this practice. They post photos of their awards and achievements, saying, “I am humbled” by being given this award and that recognition, etc.
It seems like “Size Does Matter” was the critical philosophy then, and this does apply not only in business but also in churches and faith-based communities. An American friend told me, “You know, Francis, I have visited many of these faith-based communities in my many years of ministry work. And when I am introduced to their leaders, it does not take more than 10 minutes before they start telling me how big the congregation they have and how grand their programs and vision are. And then they follow it up with the words, “Praise the Lord, and God is good!”
I guess the wise King Solomon was right. There is nothing new under the sun, and as one wise philosopher says: “No new things are happening. Just the same old things are happening to new people.”
Business success used to be perceived and measured by how many fancy offices it has and how many people are working for it. Of course this doesn’t pay any attention to the fact that the same business may post growing losses yearly with no recovery. And then there were terrible business owners and leaders who were fueled by crazy and dumb new-age motivational cliches thinking that doing crazy things qualify them as “visionaries.” They eventually wasted many resources and ran their businesses to the ground.
The objective of a business is to turn a profit, not to be bloated. The more bloated a company is, the slower it is and the more trouble it gets if sales slow down. Today, the headcount is not something business leaders can “humbly brag” about having, it is often a measurement of the organization’s efficiency or lack thereof. It is erroneous to think that solving business problems involves hiring more people to do the job. Not so. Many companies with 50 people can have the same work (or better) accomplished by a company with10 people armed with the right technology. Do not fall into the bigger is always a better trap. What is better depends on what kind of business you want to run and what produces the best results.
The dynamics for multi-national companies and mammoth FMCGs would be different but let me address the majority of the business leaders who comprise the SME (small and medium-sized enterprise) sector.
Do not boast about turnovers. You should also consider and talk about expenses. A business can clock a turnover of P100 million a year, but if its expenses are P101 million, that doesn’t make the business successful, especially if losses keep growing yearly. A business with a turnover of P10 million but P5 million in profit is technically more successful than many bigger enterprises. Sometimes you hear business leaders say, “We know we may be burning cash, but I can flip this business over for a lot more.” That makes it a potential asset but not a successful business. Do not bet on it. Successful acquisitions are not that common and only work if it makes economic sense for the larger company buying you out. Most acquisitions fail. And the company has to either be folded or sold for much less than the founders hoped. The business is not successful until it earns more money than it eats up.
There are many other erroneous assumptions but the space for today is limited. Perhaps I can bring them out again some future days. Meanwhile, it is a good and wise business practice to be humble without bragging and let your financials’ positive results speak for you.
(Francis Kong runs his highly acclaimed Level Up Leadership 2.0 Master Class Online this July 5-7. For inquiries and reservations, contact April at +63928-559-1798 or and for more information, visit www.levelupleadership.ph)