Learning from Goliath: Lessons for small business owners

The Davids of the business world can still take down Goliath.

David had to study Goliath before taking him down. This provides a lesson for small business owners.

By Michelle van Schouwen

Small business owners benefit from observing both strengths and weaknesses of large companies.

Fostering innovation

Innovation is everyone’s responsibility. Innovation starts at the top, but unless it permeates the culture, a large company is not likely to optimize it.

The good: The tech sector is famous for creating conditions conducive to creativity and innovation. Google is a prime example. It hires the best people money can buy, gives them time to investigate projects that interest them, feeds them to keep bellies full and brains active, and altogether creates an environment in which invention is prized.

The bad: Eastman Kodak neglected to encourage innovation when it needed to. Instead of using its deep resources to lead during the early digital photography revolution, the company clung to its core offerings for film-based imaging. It did not direct its team to go forth and “think digital” during the early years when other companies were making the leap. As a result, Eastman Kodak (formerly Kodak) has now been through bankruptcy, sold off many of its assets and shed lines of business. A 2015 New York Times article says, “Today [Eastman Kodak] has $2 billion in annual sales, compared with $19 billion in 1990 when consumer film was king. It now has 8,000 employees worldwide; it had 145,000 at its peak.”

The takeaway: Innovators win. Companies that fail to foster innovation (or to adapt; see below) suffer. Innovation is not typically accidental; it is part of a culture, or it is not.

Becoming an adaptive company

Adaptability is related to innovation, but being an adaptive company is less about the whole team than about management, the board and the shareholders. An adaptive company must be adaptive at the top; otherwise, nothing changes.

The good: Just think of all the new inventions you’ve seen in recent years. From the latest smartphone to Facebook, drones to new cancer-fighting drugs, time-saving apps to improved wind turbines for renewable energy, adaptive companies have brought a myriad of inventions to our lives, for better or worse. Many have been put forth by large companies. But make no mistake, small startups and independent inventors and developers have been part of the community that allows adaptive companies to succeed.

The bad: In 2011, Harvard Business Review published a popular article Adaptability: The New Competitive Advantage. It is still relevant, unlike some of the products its readers may have introduced back in 2011. The article explains that traditional goals, such as building “an enduring (and implicitly static) competitive advantage” and pulling together the “right capabilities and competencies for making or delivering an offering” are under siege in an era in which the moment a company completes these tasks it may have to toss the work aside and start over with new market needs in mind. Many companies address these challenges with adaptable teams, partnerships with other companies, digital processes, and – once again – a culture that fosters innovation. Clearly, however, the struggles are real. Think about the erstwhile Hewlett PackardYahoo and other distressed large companies; Eastman Kodak, too, of course.

The takeaway: Big companies have it tough. Small companies are often more adaptable than large ones. Fewer people are involved in decisions, you probably don’t answer to a team of stockholders and in many cases, you – or maybe you and a partner – are in charge. Here is a good story about The Marlin Company, a 103-year-old printing company. Most of its innovation has been in the last dozen years. Your team has the capability to do the same.

Developing a satisfied workforce

Why do some companies seem to have happy, productive, engaged employees, while others foster grumbling and high turnover?

The good: That’s funny – Google again. For seven of the last ten years, it has ranked as Fortune’s best company to work for. Others on the list also rate high in their employees’ evaluation of the “Trust Index”: “management’s credibility, overall job satisfaction, and camaraderie,” factors that are weighted as two-thirds of Fortune’s job satisfaction ratings. Pay and benefits, by the way, are grouped with other factors for the remaining one-third of the ranking, the “Culture Audit.”

The bad: 24/7 Wall St. conducted a survey to check out the other end of the spectrum: the worst companies for which to work. For the companies that had the misfortune to make this list, factors irking employees include lack of work-life balance, culture and values, and to a much lesser extent, pay.

The takeaway: Trustworthy and trusted management is the most important factor in employee satisfaction. Job satisfaction, which can include not only the work people are doing but also their sense of having satisfactory work-life balance, is also very important. Pay your employees fairly, but in many cases, money is not the most important factor in satisfaction.

Managing reputation

Big companies are highly visible. Their reputations are affected by customer service, product quality, legal issues, and stories – good or bad – that make the news or populate social media feeds.

The good: Wall St. 24/7 has done the research, rating companies on factors including “emotional appeal, products and services, vision and leadership, workplace environment, social responsibility, and financial performance.” According to this post detailing its 2015 results, “Upstate New York-based grocery chain Wegmans is the most highly-regarded company. Also notably, Samsung surpassed Apple this year as the technology company with the best reputation, and Amazon.com moved to second overall after occupying the top spot in the previous two years.”

The bad: According to the same Wall St. 24/7 study, Goldman Sachs has the worst reputation of any American company. Bank of America and AIG were close behind. Apparently Americans are not forgetting the financial meltdown of 2008-2009, and are holding these financial companies, all of whom were players in the crisis, responsible.

The takeaway: “Ask for forgiveness rather than permission” can be a terrible mistake. As Warren Buffett famously said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.” Once again, having good values and living by them can be key to long-term success.

Goliath… and David

Large companies have many advantages. They have a great deal of money, in most cases. They can afford to hire and retain excellent people. They can lobby the government for advantages and favors in ways that small businesses generally cannot do. But they are also behemoths, and can be beholden to shareholders, run by inefficient or misdirected teams, bogged down in procedure, and slow to respond to industry and market change. Sometimes they are highly innovative and other times tone-deaf to changes in culture.

From this, take the best practices that you can reasonably apply to your own business, and avoid the serious missteps even a household-name company can make.

Sure, Goliath, that Fortune 500 giant, is powerful. At our best, we, the Davids, the small companies, are agile and smart. We have our strengths, too.


Michelle van Schouwen is president of van Schouwen Associates, LLC (vSA), a B2B marketing company based in Longmeadow, MA. The company is known for vSALaunch, its proprietary, modular and scalable system for B2B marketing launches, vSAConsult, its executive-level strategic planning capability, and for its expertise in integrated marketing for B2B. vSA has thrived for over three decades, always working to foster innovation, industry best practices and strong values.

Leave a Reply

The Self-Employment Survival Guide can help you succeed. Learn all about it here.

Self-Employment Survival Guide book cover