Has your company answered the big small question? If not, it could be a continuing source of distracting consternation.

What is the big small question? First, a bit of background, well-articulated by Ridgely Evers in a recent issue of American Express’ OPEN BOOK. Evers headed up the creation of Quickbooks at Intuit, has served as CEO of a number of Bay-area companies, is managing partner of a venture capital fund and is a board member of SCORE. In other words, he’s been around. He says:

People think there’s some kind of continuum between the smallest and biggest business – an unbroken line between me and the mouse on my desk and Microsoft – and that there’s some magical moment where you transform from being a small to a midsize to a large business. In fact, research shows that to be very far from the truth. Each form of business is a totally separate beast, and there are vastly different skill sets in running each one.

The real difference between a small business and an enterprise is the owner’s attitude toward growth. A Silicon Valley start-up is completely focused on getting big, and naturally risks failure to get there. A true small business, on the other hand, is focused on becoming profitable, feeding a family, and staying in business. That’s a fundamental psychographic and cultural difference.

I’ll say it is. And it can be a source of friction—often misunderstood, perhaps even unrecognized—at growing companies. Unless the entire leadership team is aligned and on board with respect to growth and profitability objectives (and the resulting risk ramifications), members of it are likely to make counterproductive decisions.

Which leads to the big-small question: Is your organization a big small company, or a small big company? How you answer that will impact just about every strategic decision you make. There is no right answer; the only wrong answer is not having an answer.

I’ve said it before but it bears repeating: the number one issue that keeps struggling companies from effectively recovering is not a loss of focus, a loss of nerve, or marketing inconsistency (although all are contributing factors); it’s a lack of strategic alignment among the management team. If your company hasn’t answered the big small question, make it a top priority. It will not only affect how you answer other things, it may change the questions altogether.

Now that we’re well into 2010, how’s your company doing?

Are your objectives clear? Is your team operating like a well-oiled machine? Are you focusing on your core? Are you taking prudent risks?

If you aren’t sure about—or don’t like—the answers to the above questions, click here to take a confidential, anonymous, three-minute self-diagnosis. By answering twenty questions you’ll get a snapshot of how well your company is resisting the destructive internal dynamics I discuss in When Growth Stalls. And you can encourage other members of your team to take it to so you can compare results.

Spend a few minutes today reflecting on how your company is performing and, if necessary, make a minor course correction. It could make a major difference.

The dean of automotive reporting, Paul Ingrassia, published a terrific interview with Alan Mulally, CEO of Ford Motor Company, in Saturday’s Wall Street Journal. Citing Ford’s $2.7 billion 2009 profit, and the fact that it was the only U.S. automaker not to duck into bankruptcy, Ingrassia noted how Ford might even surpass GM in market share for the first time in more than eighty years.

In When Growth Stalls, I document how struggling companies tend to keep themselves down through a combination of a loss of focus, a loss of nerve, a lack of management consensus and marketing inconsistency. I found it interesting that in Ingrassia’s analysis he inadvertently referenced how Mulally has dealt with three of these issues:

Loss of Focus: “[Mulally's] method has been to simplify, relentlessly and systematically, a business that had grown way too complicated and costly to be managed effectively. ’Improve Focus, Simplify Operations,’ reads one of Mr. Mulally’s many charts, which he repeats like a sacred mantra. Soon after his arrival Ford began shedding brands—Jaguar, Land Rover and Aston Martin among them—that the company couldn’t afford to support. Volvo will be next to go.”

Loss of Nerve: “The core Ford brand got an investment infusion to replace aging cars and revive a model lineup that had been heavily tilted toward gas-guzzling trucks.”

Lack of Consensus: “Mr. Mulally has overhauled the often-contentious culture in Ford’s executive suite. Most of his appointees are company veterans, but they’re the sort of people who typically got overlooked when style seemed to count more than substance, as it often did at Ford…Internal surveys show 87% of Ford employees believe the company is on the right track.”

Mulally summed up his recent success with a simple statement: ”It’s all about producing products people want.” That may be true of every company, but too few get it done–especially in the American automotive industry. I, for one, hope Ford’s comeback is a lasting one.

After months of intrigue, Kraft finally made a successful bid for venerable British candy maker Cadbury, leaving archrival Hershey’s on the sidelines.

Kraft management predicts that the $50 billion combined company will be able to save $675 million over three years, but that’s not the primary reason for the merger. It’s all about global distribution and access to developing markets. Cadbury has it, Kraft wants it. Makes sense on paper.

Most mergers do make sense on paper, yet many become spectacular failures. The reason? A lack of appreciation for just how difficult it is to integrate not only global operations, but two proud and independent workforces.

Kraft is going to face this problem in spades with Cadbury. Todd Stitzer, Cadbury’s CEO, said that Hershey’s would have been a better cultural and operational fit. The company’s Chairman, Roger Carr, took it a step further by saying Kraft is “an unfocused conglomerate” with “unappealing categories” and management that “underdelivers.” Carr went on to say, “There is no strategic, operational, managerial or financial reason” for the merger.

Sure, Carr’s statement may have been a bit of strategic bluster to raise the value of the offer (which he succeeded in doing), but it sounds pretty categorical to me. And it was telling that not a single Cadbury executive was present on the conference call with analysts to discuss the deal. Hmm.

Kraft estimates it will take $1.3 billion to “integrate Cadbury.” I’m not sure exactly what that means or who came up with the number, but I don’t know how anybody could forecast the costs associated with the fear, resentment and internal jockeying with which Kraft and Cadbury managers and employees are now having to deal. The fact that Britons consider Cadbury a national treasure that has been overrun by ugly Americans sure won’t help.

Let’s hope Kraft doesn’t end up with a stomachache.

“Most of the world seems to be focused on the Americans who are unemployed. We’re focused on the 90% that are still employed.”

Those are the words of Ron Shaich, CEO of Panera Bread, the 1,300-unit bakery-cafe that has found a way to thrive in spite of the recession. Its formula? A combination of smart financial management and keen understanding of its core customers, most of whom remain gainfully employed (and ever-more attuned to good value).

Rather than cutting corners, Panera has focused on offering more to its broad range of middle income customers, including free wi-fi access and frequent new menu offerings. “In many ways, we’re renting space to people and the food is the price of admission,” said Shaich. Panera COO Rick Vanzura agrees, saying, “A bunch of folks have been cutting quality to cut price to go after the marginal customer. We said a better strategy that addresses a bigger group of people is providing better value.”

The strategy is working. In 2008 (a very bad year for most fast-casual restaurants), Panera Bread grew by double digits. In 2009–the worst economic year in generations–the company managed to keep same store sales from declining, and in the third quarter actually increased them by 3 percent. Food industry analyst Darren Tristano pinpoints why: “Panera’s on-trend with what consumers are asking for: fresh, customizable, convenient, won’t break the bank.”

Panera Bread has been able maintain its focus because of careful cash management. Rather than using debt to expand, assuming the good times of years past would keep on rolling, the company grew slowly and deliberately over the past decade. That kept it healthy from a cash flow perspective and prevented it from having to cut corners or cut margins (or both) when times got tough. As Shaich says, “Every chain is cutting something — portion size, quality, hours of labor. The result is that ultimately the customer feels it.”

Most players in the restaurant industry—in most industries, for that matter—think the current game is all about price. Panera Bread is an all-too rare exception, demonstrating that companies that keep their focus, nerve, consensus and consistency can thrive even in bad times. I’m a fan.

What do you with a hotel brand that’s become outdated, irrelevant, and in some ways a signal to stay away from the properties to which it’s attached? If you’re InterContinental Hotels Group (IHG), owner of the Holiday Inn franchise, you take a zero-tolerance approach to revitalization.

A November 13 Wall Street Journal story reported that IHG is preparing to pull the Holiday Inn flag from as many as 300 hotels in North America whose franchisees won’t spend as much as $250,000 per property to overhaul their lobbies, signage, lighting and bedding, among other things. Said Kevin Kowalski, SVP of brand management for IHG, “On the compliance date, Feb. 1, those hotels will get a failure letter and so will their banks.”

Those are tough words, and they back up a tough policy announced back in 2007–before the recession made financing for such renovations difficult to acquire. But IHG has little choice if it’s to keep the damaged brand from sliding into oblivion. It has a responsibility to restore the Holiday Inn brand on behalf of the other 2,400 properties, 1,400 of which were substandard and whose owners have embarked on the required remodeling.

Once one of the nation’s leading hotel chains, Holiday Inn milked its half-century of heritage for too long, allowing many of its properties to show (and smell) their age. IHG is doing the best it can to address the brand’s long-eroding reputation, having stripped the name from hotels accounting for 125,000 rooms around the globe, according to the Journal. As it does, it continues investing in all-new properties that will aid in revamping the brand’s reputation, as well as its Holiday Inn Express sub-brand.

I can’t say that Holiday Inn makes list of hotels I might choose for my next vacation or business trip—I’ve been disappointed (disgusted?) the handful of times when I’ve had no choice but to stay in one in the past. That said, knowing that IGH is drawing a line in the sand, I’ll consider giving the brand another shot. That kind of commitment is worth rewarding.

Not a day goes by without more news about Detroit’s beleaguered automakers. While each new development is notable in and of itself, I find it more telling to take a few steps back and look at the big picture.

Below are a few clips from selected Wall Street Journal articles I’ve run across over just the last few days. Take a minute and scroll through them. They tell a fascinating tale.

First, GM continues its inability to focus, revealing a growing lack of consensus between management and the board:

“In a dramatic change of course, General Motors Co. backed out of a deal to sell the company’s European operations to car-parts supplier Magna International Inc., and now plans to spend billions to restructure the money-losing business itself.”

“The decision…was made at a board meeting Tuesday in which the company’s directors strayed from the plan of Chief Executive Frederick “Fritz” Henderson, who had spent months negotiating the Magna agreement.”

“The Opel deal is the second major transaction to fall apart for Mr. Henderson in little over a month.”

“Whereas Mr. Henderson’s predecessor, Rick Wagoner, had often won in the boardroom by relying on the support of long-serving directors, Mr. Henderson appears to be tiptoeing through land mines of strong opinions by adjusting his game plan.”

“Carl-Peter Forster, who worked for GM for more than nine years, is quitting as chief executive of GM Europe. The decision follows a vote by the company’s board of directors on Tuesday to scrap a plan to sell control of the German Opel unit…”

“Despite his dissent of late, Mr. Forster was long viewed as a strong asset on GM’s executive roster and his departure serves another blow to Mr. Henderson, who has seen his management bench shorten since the company’s exit from bankruptcy.”

Across town, Chrysler is making fairy-tale sales and market share predictions to try to convince investors (that means you, taxpayer) that it will repay the $9 billion it owes us by 2014:

“The company said it is counting on a slew of new models to spark a surge in sales over the next five years and drive its revival.”

“Chrysler—which has seen its sales plunge by half in the last few years—predicted revenue will rise about 20% a year, from $42.5 billion in 2010 to $67.5 billion in 2014, and said it would break even in 2011.”

“To hit its financial targets, Chrysler expects to double its world-wide sales, from 1.3 million cars and trucks in 2009 to 2.8 million in 2014, and predicted its U.S. market share will rise from about 6% in 2009 to 11% in 2014.”

Meanwhile, Detroit’s only private automotive company, Ford, has gone about regaining its focus, finding its nerve and sticking to its game plan.

“Last week Consumer Reports gave the company quality ratings comparable to those of Honda and Toyota.”

“On Monday, Ford reported its second consecutive quarterly profit—and more impressively, a swing from a $7.7 billion cash burn a year earlier to positive cash flow of $1.3 billion in the just-ended third quarter…”

“The company gained a percentage of market share in the first 10 months of this year, no easy feat in an ultra-competitive market.”

“The company’s turnaround actually began three years ago with decisions that amounted to zagging every time that General Motors zigged, which was remarkable for a company whose strategy for decades was to follow GM.”

“While GM kept its unwieldy assortment of eight brands, Ford sold Jaguar and Land Rover, cutting its brand lineup down to a manageable size.”

“What’s more, shedding brands and shunning the mortgage business has helped Ford focus on quality, where it had slipped badly early in this decade.”

“Consumer Reports said last week that 90% of Fords, Mercurys and Lincolns rate average or better in quality, right up there with Honda and Toyota.”

“When the economy recovers and car sales increase, Ford could be in great shape.”

The automotive business is complex, but it doesn’t have to be that hard. Focus, nerve, consistency, consensus—no matter the industry, all tend to diminish when growth stalls. And all are essential to getting it back.

At the moment, Ford is the only one of the Big 3 to be paying attention.

One of the most common (and destructive) internal dynamics that tends to arise when growth stalls is a loss of consensus among the management team. Because of the longstanding and complex relationships involved in family-run corporations, the issue can be especially problematic for them.

If you’ve read When Growth Stalls, you understand the internal dynamics that tend to keep struggling companies down: Lack of consensus among the management team, loss of focus in the marketplace, loss of nerve (usually evidenced by how a company invests–or refrains from investing–its resources), and inconsistency.

I long ago ceased to be amazed when I saw struggling companies dealing with two, three, or even all four of these issues, as they tend to feed off one another. What still amazes me, however, is when more than one of these destructive dynamics rears its head within a single, 750-word newspaper story.

The Wall Street Journal’s October 12 column about Carrefour, the world’s second largest retailer, is a case in point. The Journal’s Ellen Byron and Christina Passariello interviewed new Carrefour CEO Lars Olofsson about the current state of affairs at the company, and published selected excerpts. Here are a few of my own excerpts from his answers (emphasis added):

“If Carrefour had some difficulties in the last 10 years or so, it is because they lost focus on the consumer.”

“Carrefour wasn’t consistent in the execution of its strategy.”

“There has been this ambiguity between going for the bottom line or for the top line, and that means the whole organization hasn’t been aligned in one clear direction.”

Three-for-four in less than a thousand words is pretty amazing, and I suspect if they would have published the full interview evidence of a loss of nerve would have also been apparent. After all, Carrefour brought Olofsson into the stumbling company in January, presenting him with (as the Journal put it) “one of the most difficult assignments in the industry.”

Carrefour has some 15,000 stores around the world and a leadership team that is second to none. But no company is exempt from the forces that plague management when growth stalls–not Olofsson’s, not mine, and not yours. The key is to stare them down and fight them off. As you do, you can get back to business.

Well, Labor Day is behind us, autumn is upon us, and we’re about to come up on a year since the fall of Lehman Brothers.

The recession itself is almost two years old, having officially started in December, 2007. Most companies began to feel the slowdown early last year, followed by an unanticipated shockwave that rippled through the economy in September. Since that time there has been a steady drumbeat of bad news, and businesses have had to find ways to cope with and adjust to continuous uncertainty about what’s going to happen next. Washington hasn’t helped, taking on one of history’s most consequential and divisive arguments about the role of government at a time when the economy needs rest. No one has any idea what the outcome–or the consequences–of the argument will be.

So how ya doin?

It’s not a trivial question. When the story of this recession is written with the benefit of hindsight, I believe we’re going to see significant analysis about the psychological effect the protracted downturn has had on corporate culture, and particularly corporate leadership. Fatigue makes cowards of us all, as the saying goes, and as business leaders we’re nothing if not fatigued.

As a consultant I’m seeing an increasing amount of decisions made based on emotion, many of them ill-advised. The kindling of internal conflict is dry and dangerous, vulnerable to the slightest spark of insult or dissent. Longstanding customer relationships are weakened as tensions rise and trust declines. Managers are struggling to manage not only the financial challenges at work, but those at home as well.

There’s no easy way out. There’s only a way through. And we have to get through it together. The good news is that, like most things in life, recognizing the struggle is the first step towards overcoming it.

Take a minute today and reset your perspective. Determine to persevere. And offer a word of encouragement to someone you know who needs it. It might just make you feel better too.