What is Midsize?
I was at an Oracle event this week being updated on their new Enterprise Manager 11g. It will be the subject of a future blog post so I won’t go into it now. I went there to see how this software could be of use to the midsize manufacturing and E&P industries as well as the service companies that market to them. As I watched the presentations I was struck by the fact that I was uncertain of the value this tool for the market segment I was focused on.
Then I realized that the reason I was uncertain was that I have been relying on a vague, generalized notion of what midsize meant. We have all seen a simple pyramid like the one shown on the left to represent market segments. The sections are defined by clean, straight lines. In this pyramid I have shown clouds around those clean, straight lines as an indication that they actually have fluffy, vague locations on the chart. I knew that I had to firm up my definition of what midsize meant.
So what is involved in defining midsize as it relates to businesses? First, we have to realize that one variable is the industry that business is in. For example a midsize bakery is not the same size as a midsize refinery. Another popular definition is the number of employees. In both cases, the definition depends on the industry. The dilemma for those of us who have to worry about marketing is that definitions more complex than the ones already noted are not useful for sorting available data into market segments. By that I mean that data on number of employees, revenue and industry are readily available from various sources. Those criteria can be easily plugged in to database searches to generate categorized lists for marketing campaigns.
I believe what is needed is a two pass approach. First, use the simple criteria noted above for a first cut on the data. Then use a more elaborate rating system 
to fine tune and validate the list. It’s more work for sure but will generate higher quality marketing data. My rating system focuses on the notion that the complexity of a business is more useful metric for defining midsize. The list represented by the radar chart on the right identifies a number of attributes to be evaluated. Not all of the attributes listed are complex, like revenue and employees, but most are. For example, one of the attributes is the use of social media tools by a business. Clearly, most businesses do not use them very much at this time but the trend is for increased use in the future for most businesses. Increased use of social media incrementally increases the complexity of the business.
My rating system gives each attribute definitions for each of five ratings. Each attribute is considered for the subject business and given a rating. For those of us who prefer visual representation of data a radar chart provides a shape that corresponds to the overall complexity of the business.
I suggest that this approach would be helpful for the subject businesses themselves. This rating system is basically a simple methodology to focus on each segment of their business, decide where it is today and where they want to go in the future. The results can then be used to decide what projects to pursue and what priorities to set. Large enterprises already have very complex and sophisticated approaches to doing the same thing. Smaller businesses have neither the time nor specialized resources for complex approaches. My rating system can be used in a limited amount of time by non-specialists.
I hope my pitch for a rating system to assess business complexity as the definition of midsize provides some food for thought for customers and vendors alike. I’m not sure referring to my market as mid-complexity businesses would be right thing to do. Maybe I’ll just keep referring to midsize businesses as my market and send a link to this blog post as follow-up.
Thanks for stopping buy. Stay tuned for more…
