Why Small Businesses are Beasts

Here at Squat New York we share the same philosophy as Jeff Bezos, CEO of Amazon: if a team isn’t full off of two pizzas, it’s too large. Not only are smaller teams cheaper to feed, but they generally maintain a productive level of agility and motivation. We’ve seen first hand how this leads to higher efficiency, more fluid communication, and greater creative output. Coincidence? We think not.

Engaged employees are Efficient Employees

Ever heard of the Ringelmann Effect? It’s the tendency for productivity to drop when groups sizes rise. It was named after Maximilien Ringelmann, a French professor of agricultural engineering who conducted an experiment with a game of “tug-a-war.” He found that one person pulling on the rope would give 100% of their effort – a percentage that dwindled per individual as more “pullers” were added. This effect is backed up by a more recent study that found 42% of employees at companies of 10 or fewer were engaged at work compared to just 30% of employees at larger corporations.

So why is this?

Because their contribution and performance becomes invisible. When it’s clear whether each person is pulling their weight, groups get motivated and invested in their projects. Us small teams want our projects to succeed just as much as our clients.

What Little Hierarchy Can Accomplish

When the chain of command is shorter and there are less people to filter information through, two things happen: closer relationships and faster production time. Small businesses will often function like a family that responds to each other’s as well as client’s needs relatively quickly. Essential project team members will meet with a client face-to-face, listen intently to their input and incorporate any changes almost immediately. There are no lengthy processes, protocols or bureaucratic issues to block progress.

This allows for a strong foundation for the relationship, as clients will feel heard and be able to put “faces” to the people they’re working with. But more importantly for the client, it creates a shorter pathway towards achieving their ideal vision and goals.

Open for Innovation

You would think that more brains at work would produce more ideas and positive change. But the fact is – too many ideas end up colliding. Couple that with a fear of risk-taking, especially from followers of long-established processes. And there, we see how innovation can become stunted.

Small businesses, on the other hand, are well-positioned to introduce and develop new ideas right from the start. There are less people to run things by, so approval is given somewhat easily. The people hired by small businesses also tend to be self-starters – those who can manage themselves and are already comfortable with presenting new and better ways of doing things.

Perhaps we’re a little biased, but you have to admit: there are many things to love about a small, functional, family-like team. That is, if you enjoy exponential personal and professional growth.