Seth Godin had a recent post about how organizations tend to go from crisp to soggy over time.

While I agree with his points, I think that there’s a better analogy to explain why companies need processes as they grow.  I call it the principle of the elephant and the ant.

Hollywood horror movies nonwithstanding, you can’t scale up an ant to the size of an elephant.  The mechanisms that work so well for a one-gram ant don’t work for a 10-ton elephant.

The ant is like a startup: It’s small, nimble, and surprisingly strong for its size.  When you’re that small, you don’t need a lot of internal structural elements–a thin exoskeleton more than suffices.  It doesn’t even need lungs to breathe, relying instead on its surface area to allow oxygen back and forth.

Similarly, startups don’t need a lot of internal processes or documentation.  When your entire company consists of three people in a single office, everyone and everything in your company is in touch with the outside world.  If something comes up, you just poke your head over your laptop and fix it.  An “all-hands” meeting consists of nudging the co-founders to your left and your right.

But as your company grows (which is almost always necessary if you build a successful business), that approach doesn’t scale.  You don’t see 1,000 person companies being run like a 3-person startup for the same reason you don’t see ants the size of Volkswagens.

(Be glad that we don’t!)

Instead, your company begins to resemble the mighty elephant.  The lightweight exoskeleton is replaced by a thick endoskeleton.  All sorts of internal structures like lungs are required to support life.  And you can bet that an elephant can’t scurry at a rate of 5 times its body length per second, or lift 50 times its own weight.

Big companies need endoskeletons to function.  Yes, these processes impair flexibility, and force you to trade in the elegantly slender legs of the common ant for the stubby tree-trunks of the ponderous pachyderm, but the alternative isn’t pretty.  A 10-ton ant would instantly collapse and die under its own weight, unless beaten to the punch by asphyxiation.

And there are benefits to being big.  You may not be able to run as fast or lift as much on a relative basis, but an elephant can definitely cover longer distances than an ant, and no ant in the world can lift an entire tree with its trunk.

Both elephants and ants have their place in this world, just as crisp and soggy do.  The trick is making sure that your approach is appropriate to your situation.  There’s a reason why invertebrates are smaller than vertebrates, but mice are smaller and faster than lobsters–only you can decide what the right answer is for your company.

P.S. One final alternative to keep in mind: While a single ant can’t move a rubber tree, an army of them certainly can (or at least decimate the village where the tree is planted).  To what extent can your company act like a swarm of startups, rather than as single elephant?

One of the major advantages that Barack Obama currently holds over Hillary Clinton in the race for the Democratic presidential nomination here in the United States lies in how his campaign has managed the media.

Clinton’s campaign has complained that the media coverage is more sympathetic to Obama (which is pretty evident to anyone who watches CNN or MSNBC), but a bigger issue is simply the volume of coverage.

In political contests, pundits often refer to the “air war” and the “ground war.”  The air war consists of media exposure (either paid advertising or press coverage)  to drive awareness, while the ground war consists of the door-to-door organization to get out the vote.

In many ways, this division resembles the classic divide between Marketing (air war) and Sales (ground war) in business.

When it comes to the air war, the key is to drive awareness.  As I’m fond of saying, your most potent competitor is generally ignorance.

Because Barack Obama has become a magnet for free press coverage, he has a significant advantage over Hillary Clinton in the air war.  Every time he holds a 15,000-person rally at a sports arena, with thousands more spilling out into the streets, it’s a newsworthy story that can draw national coverage, and perhaps even more importantly, local news coverage in both print and TV.

It’s possible to substitute money for coverage by blanketing the airwaves with paid advertising, but as Mitt Romney has demonstrated, pound for pound, paid ads are less valuable than free coverage.

The advantage that free coverage brings can be seen in the relative fortunes of the Obama and Clinton campaigns.  While both have raised roughly the same amount of money since 2006, Obama’s press advantage also allowed his campaign to spend more on the ground game than Clinton, while still maintaining a larger warchest.

The same principle applies in business.  If you can get the press to do your job for you, why spend money buying ads?  What’s more valuable, a 1-page ad in Fortune, or a glowing article?  And don’t forget, that article didn’t cost you $25,000.

The key question then is, how do you get that press coverage?

You can spend a ton of money ($20,000+ per month) on high-priced PR agencies, but as the example of Hillary Clinton shows, the best spin machine in the world can’t help much if you don’t have a story people want to write about.

Barack Obama has been successful during the nomination battle not because of his spinmeisters, but because he successfully embodies a story that people want to hear and retell.  What American doesn’t want to believe that anybody (including an African-American with a Muslim name and father, raised by a single mother) can grow up to be president?  And if people want change and a break with the past, there is no way for Hillary Clinton to argue that she is best positioned to deliver it.

Great marketing isn’t about selling your story.  It’s about being the story.

The same applies to the business world.  Google famously refuses to spend any money on advertising.  Guess what?  They don’t have to, because they are the story.

Microsoft can spend far more money than Apple on ads (and it does).  But Apple always wins the air war (at least during the iPod era) because it is the story.

To sell your story, be the story.

One of the skills every marketer (if not every person) needs to master is the art of managing expectations.

Managing expectations is a “Goldilocks” task–too high, and they’ll be impossible to meet; too low, and they’ll detract from your accomplishments; just right, and you’ll be a hero.  Of the potential pitfalls, high expectations are perhaps the most dangerous.

High expectations are seductive.  It feels good to have everyone saying good things about you.  “The Next Bill Gates” is a favorite chestnut that the business press dusts off whenever a hot new company with a photogenic founder appears on the scene (see Andreesen, Marc; Abrams, Jonathan; and Rose, Kevin).  But no matter how good it feels to ride the wave of hype, sooner or later, you’ll have to deliver the goods.  Too-high expectations carry a double-whammy: When they prove to be wrong, not only is the result a downer, it kills your credibility.

Take the impact of expectations on the current U.S. presidential race.  Senator Hillary Clinton began as the prohibitive favorite.  As recently as November, the Iowa Futures Market (the best predictor of presidential politics, since real money is at stake)  showed that her chances of earning the Democratic nomination were 75%.  That’s what made her third place finish in Iowa so shocking.  And as a result, in the immediate aftermath of the loss, she plummeted to a projected 25% chance of winning the nomination.

After that, however, the expectations game shifted.  Now the high expectations shifted to Senator Barack Obama, as a tidal wave of coverage (helped along by his own strength at inspirational oratory) sent his poll numbers skyrocketing.

But while the excitement helped Obama’s campaign in many ways, allowing expectations to get ahead of reality came back to haunt him.

Clinton had held a 17-point lead in New Hampshire, but it seemingly crumbled overnight as poll after poll showed Obama leading in the state.  On election night, Clinton squeaked out a 3-point win.  So who actually won?  Was it Obama, for making up 14 points in less than a week, only to fall short at the end?  Or was it Clinton, who held off her challenger when all expected her to lose.

The race was close enough for either explanation to take hold, but it was the latter narrative of Clinton’s resurgence (despite being a frontrunner who had lost 14 points off her lead) that ended up holding sway.

We saw a near replay on Super Tuesday this week.  After the South Carolina election (an unexpectedly large victory for Obama), Hillary and Bill Clinton indicated that they expected an overall victory once they took their message to the broader public.

Once again an Obama surge in the polls dropped the expectations for Clinton; I often thought that the national media was openly rooting for Obama to land a knockout blow.  Here in California, poll after poll indicated that Obama had closed a 20-point lead, and had even pulled ahead of Clinton.

When the dust settled, an objective analysis showed a near-perfect tie.  Obama won more states, but Clinton won the bigger prizes in New York and California.  Obama won the critical swing state of Missouri, but Clinton overcame a tidal wave of endorsements to win Massachusetts.  Obama came out with slightly more delegates, but it was statistically insignificant.

So who did win?  Nobody.  But both campaigns tried to frame the results as a win for their side–Obama by pointing out that he had overcome a big deficit in the earlier polls, Clinton, by arguing that she had done better than projected in the most recent polls.

Just politics?  Perhaps, but just ask the folks at Joost, who went from being the future of television (Sequoia had to beg Joost to take their money), to the walking dead in less than 9 months.

Great expectations require even greater execution.  ‘Tis better to set and exceed realistic goals than it is to ride the wave of hype…right into the trash heap.

A recent survey by Discover Small Business Watch concluded that the way men and women entrepreneurs think about their business is different from each other. According to the survey results that came from 1,000 entrepreneurs:

Among business women, more favor flexibility, 32 percent, to being independent, 17 percent; while men choose being their own boss, 27 percent, ahead of flexibility, 24 percent.

But interestingly enough, each group thinks the other sex has it easier as a small business owner and founder to bring in revenue:

30 percent of men think it is easier for women to attract new business and only 16 percent think it is easier for men. Among women, 39 percent think it is easier for men to attract new clients while only 19 percent think women have it easier.

For a detailed analysis of the complete study, visit the Discover Small Business Watch site:

http://www.discovercard.com/business/resources/watch.html