From multinational to SME: what carries over and what doesn’t

I’ve seen both sides of leading. For years, in multinationals: processes, committees, budgets approved in cascade, large teams and resources to do almost anything. And also as an entrepreneur, founding my own companies, where every euro that goes out is your own.

Many people think they’re two worlds with nothing in common. They aren’t. Some things carry over perfectly from one to the other, and others are best left at the door.

What does carry over: method

If I had to pick just one thing from the multinational to take into any SME, it would be method.

Today we work in a very complex environment that changes fast and where mistakes are costly. In that environment, method is never too much. It doesn’t matter whether you’re a multinational or a fifteen-person company. It’s true that in big companies methods can become more complex than they need to be. But having a method is non-negotiable.

Working from perceptions, or from know-how alone, is the beginning of the end.

The SME problem: working without numbers

I’ve seen many SMEs that run on impulse and know-how. They know how to do their job, and they do it well. But they don’t know their numbers. And not quantifying things makes them lose touch with reality.

Here’s a real example. A company was convinced its cost per order was around €30. It was the figure everyone took for granted. We checked it, and not with studies or projections that might contain errors. With invoices. The real cost was over €90 per order.

Three times as much. Impressive, isn’t it?

Think about what that means. Every price, every discount, every decision about which customers to take on was being made with a figure that was a third of the real one. The company worked hard and thought it was making money on orders where, in fact, it was losing it.

That’s what happens when there’s no method. It isn’t a lack of effort. It’s a lack of data.

What doesn’t carry over: bureaucracy

Some things from the multinational are unnecessary or harmful in an SME:

• Meetings to prepare for meetings. In an SME, the team’s time is far too valuable.
• Reports nobody reads. If a report doesn’t change any decision, it’s not needed.
• Long approval chains. Every signature you add is speed you lose.

The key is to bring the method without the bureaucracy: measure what matters, decide with data, have a plan and review it. But with one sheet, not forty.

What the multinational envies about the SME: speed

And now the other way round. What does the SME have that big companies envy? Speed.

And pay attention, because this really matters. Today it isn’t the big that eat the small. It’s the fast that eat the slow. A multinational will never be as agile as an SME. An SME can decide in the morning and execute in the afternoon. A multinational sometimes needs a quarter to approve the same thing.

The goal isn’t to choose one world over the other. It’s to keep the best of both: the speed of the SME and the method and muscle of the big company. A fast SME that also knows its numbers is a formidable competitor.

What I found hardest: my own money

People often ask me what was hardest about going from leading with plenty of resources to building businesses with my own. The answer is financial capacity. Putting your own wealth on the line isn’t the same as managing someone else’s.

But I’ll tell you something that may surprise you: I’m more generous with my own money than with money others put in my hands.

Managing someone else’s wealth is an enormous responsibility. They’ve trusted you to use it as efficiently as possible. However rich the shareholder is, that money deserves full respect. With my own, I can take risks. With what I’m entrusted with, I can’t.

To start with your numbers, use Your P&L in 1 minute and The real cost of an hour.