Business adviser and entrepreneur Ridgely Evers shares his advice about what small companies can learn from big business.
This article was excerpted from OPEN Book: Leadership. Find more information and resources from OPEN at openforum.com/leadership.
Ridgely Evers has worked on both sides of the small/big business fence. He spent five years at Intuit, where he led the creation of Quickbooks, an accounting system for small businesses. He’s since served as CEO of a number of internet-based technology companies in the Bay Area and, with his wife, Colleen McGlynn, currently runs DaVero Sonoma Inc., a producer of olive oils, wines and other artisanal food products. Evers is currently managing partner of Establishment Capital Partners, a fund investing in small businesses, and is also a board member of SCORE, “Counselors to America’s Small Business,” which provides mentoring and runs workshops and seminars for 350,000 existing and aspiring small business owners each year. Here, he offers insight on the relative merits of “small” vs. “big” business – and reflects on the leadership qualities required to make small a success.
There are three broad reasons why companies fail or underperform. Firstly, the owners shouldn’t have started the business in the first place; they should have stuck to their day jobs. That accounts for about a third of failures. Secondly, they don’t have access to the capital they need in order to grow their businesses as they’d like to. Thirdly, they make entirely preventable mistakes, which is natural because for most this is the first time they’ve run a business. The solution? Successful leaders create outside support systems where they can go for guidance and advice.
Anyone who’s using their financials to drive their business is doing the equivalent of driving their car in the rearview mirror. It’s never a happy outcome. You should check your financials often, just as you do the rearview mirror. But the important stuff is happening elsewhere. Your customers, your people, your competition, etc., are where you should focus your attention.
Keep the customer satisfied. One of my favorite metrics is the Net Promoter Score – the one that holds companies and employees accountable for how they treat their customers. It tells you whether you have delighted the customer, so that they walk away saying, “That was a really good experience,” and come back again, and tell their friends to do the same. Word of mouth is absolutely crucial, because advertising is often not an efficient mechanism for small business. If your NPS is low, you have serious problems.
There are a lot of different personality types that are able to lead successfully. You’ve got the ranting and raving types at one extreme, and the nurturers at the other. But what’s common among them is their ability to communicate. And I mean that in the sense of not just being able to broadcast but also to receive. I think that’s why, ultimately, a culture of fear is self-defeating. You don’t want your people to be afraid to come back to you if they’re not sure of something. “I’m mad at you” and “I’m unhappy at something that you did” are two completely different things.
You learn a lot more from failure than you do from success. Failure is underrated as a learning tool; it can knock you back at the time but can also teach you how to move forward with success.
Entrepreneurship is the remaining core competence in the United States. That belief that “I can do this” – it’s unlike anything I’ve run into anywhere else in the world. It seems to be deeply embedded in the American culture. ?
For more info on Ridgely Evers, see: DaVero.com or openforum.com/davero