If I asked you to define the term ‘mid-sized company’, what would you say? If your answer is, “I have no idea,” you are not alone. In fact, if you asked the U.S. Census Bureau, they would tell you that it consists of companies with revenue from $100M – $3B. According to the National Center for Middle Market, companies with revenue of $10M – $1B fit the bill. If you ask the IRS… well, that would be a mistake. Despite a non-existent universal definition, there is undoubtedly a difference between mom-and-pop shops on Main St. and brand-name companies on the Fortune 500. So, where does that leave those in between?
On really solid ground, actually. In my work with senior executives at mid-size organizations, I’ve learned (at least) one thing: mid-size companies were lean before lean was cool. The challenge for smaller and mid-size enterprises has always been that they do not have the luxury of exorbitant salaries to entice the brightest stars in industry and maintain an extensive roster of legacy employees. Of course, this challenge can also be one of their greatest advantages. Without a heavy payroll weighing down the organization, these companies have had no choice but to adapt by limiting themselves to a strong, simplified core of employees and sticking to the scrappy roots that helped launch them in the first place. Enter the informal era of the agile workforce.
Agile work and the agile workforce began as a derivative of a concept in the software development world that picked up momentum for obvious reasons – it was simply a more efficient and effective way to conduct business. Now, already having learned how to do more with less, middle-market companies are poised to take these lessons into other areas of the organization such as strategy, marketing, and corporate development.
It’s clear that mid-size companies are well-positioned to use the agile workforce to win the ever-building war on talent. In what follows, I summarize 5 reasons executives at middle-market firms should be optimistic about the future of their companies.
1. Mid-size companies are already in the pole position
As mentioned above, the lean organizational principles that are now “all the rage” were already being deployed by mid-size companies as an existential imperative. Many of these organizations survived the financial crisis and subsequent recession before the term ‘gig economy’ was even a glimmer in the eye of the first Craigslist users. They did so by changing or evolving their business models, developing new products and services, and streamlining the hiring process. Middle-market companies are smart to remember these past victories.
Today, executives at Fortune 500 behemoths are salivating at the mouth, yearning for flexibility and dreaming of circumventing the red tape that keeps them from competing with more agile organizations. With the dawn of the gig economy, smaller companies can flex talent up and down seamlessly without having to drastically change their organizational chart. There’s no reason they can’t take advantage of the on-demand talent available, for instance, through marketplaces like Catalant to enhance their core of trusted full-time employees. Advantage – mid-market!
2. Mid-size companies can now diversify and expand without traditional startup costs
Unlike large enterprises that are busy shedding portfolio offerings or whole business units to create shareholder value, mid-size companies can also use agile workforce principles to rapidly invest in growth and enter new markets. In the past, to create organic growth via new markets, businesses would have to set up or acquire entirely new companies, usually at the risk of taking a significant hit to the bottom line for several consecutive quarters.
With technological innovations and the emergence of platforms that provide access to consultants and experts in any industry on-demand, companies can quickly educate themselves about new markets, test applications, and get their hands on a treasure trove of data, all without impacting the core business. Swapping unpalatable startup expenses for low-cost investigation of potential markets allows medium-size firms to thrive and “steal” market share from their 20,000+ employee counterparts.
3. Mid-size companies have an economical perspective on consultants and external resources
Years ago, executives at mid-size organizations realized that, although big firms were flush with bright minds, the juice simply was not worth the squeeze when it came to multi-million dollar engagements with the blue chips. Instead, they relied on home-grown talent to spur innovation and growth. Why pay astronomical fees to a big shot consulting firm when you can hire and groom an entire team of fresh young minds for much less?
In 2018, leaders no longer have to choose between the two. Deploying an agile strategy by economically resourcing projects with solutions that fit the parameters like a glove allows middle-market organizations to tap into the same pool of brilliant talent in bite-size pieces. With a few clicks of a button, companies can find an independent consultant or a small, specialized firm employing professionals with 20+ years of subject matter expertise. The results speak for themselves: these companies develop a dynamic workforce composed of the stars of the organization who have risen through the ranks and store crucial institutional knowledge, augmented by specialists who are already up the curve in a particular area of expertise. Everyone wins!
4. Mid-size companies already rely less on the 9-to-5er
Every company has rockstars that provide the bedrock for success at their organization. However, whether you are a $5B company located in San Francisco or a $100M organization based in Indianapolis, the war for talent is causing heartburn for even the most seasoned HR leaders. While larger companies spend significant time attracting, recruiting and retaining full-time employees, mid-sized companies can rely on their natural agility and historical resourcefulness to change the narrative to talent access.
In the talent access game, technology is king. Utilizing tech solutions such as agile workforce platforms and expert marketplaces allows mid-market leaders to bridge the gaps between internal and external talent, keeping a strong core of full-time employees and flexing their workforces as needed. In mid-size companies, HR leaders can put down the heartburn meds. Instead of spending time attracting, recruiting and retaining full-time employees, technology has enabled them to maximize human capital and focus on what makes their companies so unique.
5. Mid-sized companies can morph more rapidly than large incumbents
Finally, let’s talk about the true David vs. Goliath advantage for mid-size companies. Even the largest medium-size companies are not riddled with the problems that face bloated, complex and bureaucratic enterprises. To pave the way for a more flexible work culture, for instance, a Fortune 100 company would need full leadership alignment. The pot at the end of the alignment rainbow? An agonizing 24-month implementation process. It’s a small wonder most large enterprises stick a ping-pong table in the breakroom and call it a day.
Mid-size companies, by contrast, can take advantage of this new way of work immediately. With buy-in from a more “intimate” leadership group and a plan to get 20-30 “power users” on board, these companies can use new-age technology platforms to enable the cultural shift within a quarter or two at most.
As technology shifts the conversation from simply attracting talent to both attracting and accessing talent, we see the playing field being leveled every day. In one of my all-time favorite movies, Miracle, Herb Brooks (played by Kurt Russell) proclaims, “great moments are born from great opportunities.” The sooner mid-size companies embrace this idea, the sooner they will become the great companies of tomorrow. As Kurt says, the opportunity is here, now all you need to do is go out there and take it.
Contact Catalant to get connected with the world’s top talent.