Matters of Size

All of us who started our own businesses decided at some point what our companies would be: We chose a focus, set guiding philosophies, developed credos, defined a company culture, settled into a working style and pursued success.

One of the most important calls each of us made along the way had to do with how large or small our organizations would be. In fact, this decision has a lot to say about how any business runs and appears to the outside world: It influences the volume of business that can be accommodated, dictates management style, narrows or broadens the organizational structure and ultimately

determines the way we perceive what we’re doing.

For all that significance and despite the fact that the company size does matter, I’ve always been impressed by how randomly most of us seem to set the scale of our operations: Successful businesses often grow naturally, of course, but too often business owners are caught off guard – and the next thing they know is, seemingly by chance, that they’re sitting atop multi-tiered, multi-functional organizations whether that was the intention or not.

MODEST START

My own business path followed that willy-nilly growth pattern.

I started out all alone, working as an independent pool/spa service technician. At first, I really didn’t know what I was doing, but I enjoyed working outdoors and really enjoyed the autonomy that pool service provided me. Looking back, I probably had no business being in business in those early days, but I worked hard and my list of clients steadily grew.

Eventually, the load I was carrying proved to be too great, so I hired my first employee. I wasn’t thinking at all about how large I might ultimately want the business to become: Basically, I was caught responding instinctively to the daily workload.

The business kept growing and I added more and more people to the payroll. Before I was fully aware of what was happening, I wasn’t servicing pools myself at all and had instead become a manager.

The operation soon outgrew my home, so I bought an office. To rationalize that extra expense and effort, I figured I should open part of the building up as a retail store. I didn’t have a clue about running such a business, but I forged ahead anyway.

As it turned out, not knowing much about what I was doing was something of a blessing: It put me in a place where I didn’t worry about making my store conform to what others in the marketplace were doing; instead, I flew by the seat of my pants and based my pricing on what I was paying for products without any reference to what my competitors were charging. I stocked products that sold and winnowed out ones that didn’t.

Back in those days, mine was a down-home family operation. I painted the store myself with the help of my two daughters, and I even published an annual company calendar dominated by photographs of my family. It was a quaint way to get things done, but by and large it worked pretty well – and did so for a good number of years.

Before long, things were rolling along well enough that I even opened a second store. I’d learned a thing or two by then and, this time out, purchased durable, quality furnishings and display fixtures, laid down carpet to match and even worked with professional signage.

By that point, I had two stores, 600 service accounts, a repair department and renovation/construction operations as well. Without much thought or reason, in other words, my one-man band had become a small orchestra with 20 players.

A REVELATION

Even at its largest, of course, mine was still a small company – but it sure didn’t feel that way to me!

There I was, managing this multi-faceted operation and running to keep up with all the things that go along with staffing and training employees, maintaining company policies and paying the bills – and then I had an epiphany.

One afternoon, I heard one of my employees describing me as “rich,” and it made me stop and think: Yes, the company was successful and provided me with a modest sense of affluence, but when I considered how much time I was investing in running the business relative to my level of compensation, it struck me that I wasn’t making nearly as much on an hourly basis as were some of my employees. Rich? No way!

Having never considered the issue of company size in any deliberate way, I now found myself in a situation I couldn’t have predicted or intended. I’d gotten into the business originally because I enjoyed the independence, but now the situation was such that my focus was managing other people and finding ways to make them productive rather than doing what I really wanted to do.

After 20 years, I decided to shift gears and sell my company. That was in 1991, and by that time I’d been doing design work for two years, loved it completely and decided to move wholesale in that direction. All of a sudden, I was now back to being independent – totally free to pursue activities that were proving to be the most satisfying and exciting to me.

The experience of having owned and operated a company that had grown to become far larger than I’d ever dreamed had taught me that the scale of an operation is what determines what its workdays are like for the one who owns it – and then and there I made the decision that whatever else I might do, my business preference would be to stay small.

For several years thereafter, I worked as an independent sales and design representative, living on commissions gleaned from a handful of local companies. That experience gave me extensive insight into the operations of other watershaping companies, and what I observed (after noticing I wasn’t terribly happy with the way they performed in the field) is that the root of most of their problems had to do in some way with the fact that none of those owners had been deliberate in determining what size was right for the company or managing the growth of their enterprises.

ACROSS THE SPECTRUM

In its current incarnation, my company focuses entirely on design work and has four on staff, including me. For right now, I’m convinced an organization this size is exactly what I need.

Our work puts us in regular contact with a variety of different firms (watershaping and otherwise) in a wide variety of sizes. Some are sole practitioners, including architects, landscape architects and an array of designers. Others, by significant contrast, are large and even multi-national firms that have a hundred or more employees on staff. (The latter aren’t huge by any means, but they’re certainly big by my standards.)

Having worked with companies from both ends of the spectrum, I’ve observed some distinct characteristics that seem to come into play with each on a consistent basis – both strengths and weaknesses.

Recently, for example, I’ve occasionally been frustrated in working with larger firms. As I’ve said many times, I love the team concept, but what I’ve run into more than once is that when a large portion of a team is made up of players within the same company, the structure and bureaucracy of the company itself can bog down the process. More than once, I’ve found myself in situations where every decision on a project is “by committee,” which means that simply keeping everyone informed is a time-consuming proposition – and getting definitive answers can be an ordeal.

Too many cooks really do spoil the broth here: Decisions that can be made in snap by a sole practitioner can take weeks with some larger firms, even though in theory the big guys should have more resources and should be better at making decisions.

Of course, there are advantages to large companies as well, particularly when it comes to amassing talent and tackling complex projects. They also reward good performance by adjunct professionals like me with referrals, and given the larger volume they can handle, that can be a huge plus from my perspective. They also tend to be more stable than smaller firms, which can make them valuable allies in times of fluctuating fortune.

From where I sit, it looks as though success in a large company comes from understanding how such organizations should be structured (something that was never a passionate interest of mine) and knowing how to manage multiple departments, offices and crews. My friend Bill Kent, president of the Horner family of companies and its 450 employees, is a natural in those sorts of organizations and his have been extraordinarily successful as a result.

His edge is that he always saw himself at the helm of a grand enterprise and has structured his education and approach to business to accommodate the layers of management and organizational systems necessary to make a firm of that size fire on all cylinders.

SCALED BACK

Of course, Bill’s 450-person company is small when you mention it alongside Microsoft or General Motors, but his business is way beyond the scope and scale of my 20-person business of yore and orders of magnitude beyond my current four-person shop. I’m constantly amazed by how he does it.

Tiny firms like mine and the even tinier firms of sole practitioners offer a completely different working profile and set of challenges. For starters, small size means hands-on work for me that would petrify the president of a truly large company.

In my case, however, that degree of involvement is what I crave – and one of the main reasons I’m determined to stay small. Sure, everyone has their own preferences on that front, but on a very basic level I think that being up to my ears in the work, day in and day out, is much more fun than managing disparate groups of employees.

Every morning when I sit down at my desk, I get directly to work in designing custom watershapes and communicating personally with clients and the other professionals who might be engaged in any given project. “Management” is for me a trifle compared to the needs of a large firm, because my participation in the process with my three compatriots is nearly constant.

As suggested above, small firms also tend to be responsive and nimble, simply by virtue of the fact that there are fewer people who contribute to decision-making. This translates to a far more self-driven and self-determined way of doing business that I see as making what we do in my company a more direct reflection of my style and personality.

At the same time, there are drawbacks to small firms. First, if a tiny operation gets swamped, it limits responsiveness and can lead to frustrations just as painful as those you can encounter in working with big companies through various project phases. Second, there’s no question that small firms can be far riskier than big ones in financial terms – especially when markets contract in the ways we’ve witnessed in the past 18 months.

Also, issues of personal performance and reputation are supremely important for small firms, some of which are only as successful as their last and current project. Yes, independence is nice, but this constant focus on the skills and creativity of one or two individuals can be quite a burden. The upshot is an unusual demand for high-level, individual performance in smaller firms, where that same need is distributed across many more shoulders in large firms.

A MATTER OF CHOICE

As I see it, there’s no right or wrong path here: Both the small- and large-scale approaches have their advantages and their drawbacks, and the key for us as business owners is to be clear with ourselves about what we’re thinking and what it will take to make the selected approach work.

No matter which path you take, of course, you must be ready to face the challenges and find the correct balance between the amount of work you undertake and your ability to deliver at an appropriate level. If you choose to stay small, you get to wear lots of hats and cut your own trail. If you come to think big, then you need to be prepared for the rigors of managing a large organization and establishing expectations and policies that maximize group performance.

One of the wonderful things about watershaping as a business is that it affords us these choices, this great range of possibilities from tiny to immense. When you stop and think about it, that freedom of choice is wonderful in the way it gives us the opportunity, each according to need and ability, to do precisely what makes us happy.

Brian Van Bower runs Aquatic Consultants, a design firm based in Miami, Fla., and is a co-founder of the Genesis 3 Design Group; dedicated to top-of-the-line performance in aquatic design and construction, this organization conducts schools for like-minded pool designers and builders. He can be reached at [email protected].