In his last article for the Harvard Business Review, Reputation.com CEO Michael Fertik talked about the downside of using performance-based bonuses as compensation at a start-up company. For his most recent column, Fertik explores the differences between large companies and small companies, offering advice for people making the transition from the former to the latter.
Read on for an excerpt of the article:
Moving from a big company to a small one is an exciting step for many successful managers. But some of the habits that made you successful in a larger company may prove destructive at a small one. Whether you are founding or joining a small company, here are some ideas to keep in mind to make the job as thrilling as possible and you more effective.
Forget influence- and empire-building. One of the qualities most consistently visible among successful larger company managers is that they know how to build influence and consensus for their initiatives within the organization. Similarly, acquiring a larger footprint of direct reports is often a sign of success at large businesses. These instincts kill small companies. Establishing and wielding influence may help you move resources in your direction in a large business. But it’s essentially a rent-seeking exercise, intended first and foremost to shift a growing portion of the limited budgets of people and funds toward your team and away from others. While the final goal may be to grow revenues or market share, that’s not the chief interest. Influence- and empire-building become ends in themselves. At a smaller company, that kind of behavior will simply create a tax on everything the business does. Instead of moving forward, the enterprise will go sideways.
Check out the Harvard Business Review for all seven of Michael’s keys to switching from a big company to a small one.
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