WHEN MONEY DOESN’T TALK
It was a morning to savour when Emirates Team New Zealand reclaimed the auld mug from Oracle in Bermuda. It wasn't just a victory to New Zealanders but a victory in that small businesses can indeed have the functionality of big businesses.
Big business benefits at the expense of small business: that's a dangerous myth. Driving a wedge between small and big businesses is not helpful to securing growth in the economy.
The business community is an ecosystem and entirely interdependent. We need to focus less on big versus small business, and more on how to manage the journey from small to big. We must remember that every business was small once and many small companies have big ambitions to grow.
Emirates Team New Zealand is a prime example of a small business competing on the World stage.
Oracle Team USA's owner, IT tycoon Larry Ellison, believes that today's America's Cup teams resemble motor racing's Formula One teams in being more about 'brand identity' and pushing technological boundaries than about national identity and a patriotic agenda. Emirates Team New Zealand prefers to see the cup as a friendly competition between foreign countries.
Because the America's Cup competition is dictated by what rules the holders want to implement, Team New Zealand has been forced to adapt, innovate and plan their way towards competing with their wealthier opponents, and there is a lot that small businesses can take out of it.
The AC72 (America's Cup 72 class) boats chosen for the 2013 event in San Francisco were revolutionary in design and extremely expensive. Foils lifted the hulls out of the water, enabling the vessels to reach speeds close to 50 knots (92.6 km/hour).
With an 8-1 deficit, the American boat began to get faster and faster as the racing progressed with more cash poured into their boat to enhance the technology. Strapped for cash themselves, there was a sense that there was nothing Team New Zealand could do to match their opponents as they went down 9-8.
It was clear that the New Zealanders could never keep up with their American opponents financially. The 2013 event showed that the larger syndicate, with their big marketing budgets and bulk purchasing power could easily over shadow smaller opponents.
There are many small businesses out there, like New Zealand were in 2013 who feel like they are constantly fighting an uphill battle. However, there are plenty of advantages that small businesses have over their larger competitors and ways to compete with them.
For small businesses, with their smaller staff and less formal processes in place, it is often much easier to innovate than it is for larger business with a corporate structure. Yes, larger companies may have the budget to try a new platform, but time is of the essence.
Small businesses might not have the bandwidth for massive new ideas, but they do have the advantage of executing and iterating quickly - which is the key to achieving results. With less red tape to cut through and a more centralised location to brainstorm, plan and execute, small businesses can actually use innovation for its competitive edge over big businesses.
Overall, this improves efficiency. Innovation can be as simple as taking an existing process and putting a new twist on it, or introducing a tool that makes a daily task more efficient.
Large businesses tend to be bogged down by stagnant legacy processes, as it requires resources to implement changes across the board. With a small business, on the other hand, the owner can introduce a new way of doing things and set it in motion almost immediately.
We saw how successfully Team New Zealand innovated in Bermuda, bringing the term "cyclors" into the sport, where the boat was powered through leg drive rather than the traditional method of grinding with the arms.
Employees make a business, so naturally the better workers you have, the more successful your business will be. Big businesses may have more employees, but small businesses can have great employees. Employees enjoy working with the boss directly involved in the business. This was illustrated by Grant Dalton's hands on approach with Team New Zealand compared to the absent Sir Russell Coutts throughout the majority of the campaign.
But the most important part of Team New Zealand's success is the way they planned ahead.
Following the deep disappointment in San Francisco they put a four year strategic plan together to win back the trophy they lost way back in 2003. If you look at an organisation's objectives as a staircase, the top of the staircase was victory in Bermuda in July 2017.
They started at the bottom in San Francisco and had to map out all the steps up the staircase to achieve their objective.
A strategic plan is vital for any business in any industry. It is the process by which owners, management and even employees assess the organisation's direction, set priorities and goals, establish intended results, focus energy and resources, strengthen operations, and ensure that all stakeholders understand the vision and are working towards achieving the desired outcomes.
It is a challenging but essential effort that produces fundamental groundwork, which will shape decisions and guide the actions that determine what an organisation is about, who it serves, what it does, and why it does it. Effective strategic planning articulates not only where an organisation is going and the actions needed to make progress, but also how it will know if it is successful.
It is clear that after this process, Team New Zealand has been successful. It wasn’t about the resources they had available to them, but the process that they went through.