“there are libraries of books, reams of articles, and endless videos and tapes on how to create a motivated workforce, but if you want to see examples of businesses that have cracked the code, so to speak, you need look no further than the small giants.”
Small Giants, page 96
There’s a point in every small business’s lifespan when, so long as they survive, they are faced with the decision of how fast to grow, and to what end. For some entrepreneurs, the idea of an IPO or Acquisition is the reason for starting the business in the first place. Small Giants is not a book for these entrepreneurs.
In the words of The Washington Post‘s, Steve Pearlstein, “Bo Burlingham’s done for private companies what Jim Collins did for public companies in Good to Great.” Which is to say that from atop his perch as Editor at Large of Inc. Magazine, Burlingham set out to codify what makes certain small businesses (less than $350 million) exceptional, virtually in every way. The companies, these “small giants”, as Burlingham has labelled them, provide exceptional quality. They engage exceptional employees who, in turn, provide exceptional customer service. These companies have particularly strong ties to their communities, rabidly loyal employees and customers that rave about them. And while every one of the companies studied can be safely labelled “successful”, many of them are actively avoiding growth, whether that entails turning down new clients, or refusing to expand geographically.
Small Giants is a book about questioning the “growth for growth’s sake” mentality in business, and examining what really makes a privately held company “great”.
The Three Imperatives
“The difference between the small giants and everyone else lies in their refusal to let go of the passion and their success in keeping it alive.”
Small Giants, page 199
Perhaps one of the benefits of easing up on the “growth for growth’s sake” mentality, is that it opens your mind to other methods of measuring success. For the 14 companies in Burlingham’s case study set, the measuring stick became quality. All 14 of these companies have become synonymous with excellence. As far as Burlingham has been able to identify, there are three broad “imperatives” that were unanimously true within the culture of each organization; imperatives that, when adhered to, allowed for that exceptionally high standard. Tellingly, all three of those imperatives have to do with employee interaction.
Imperative One: Share a Higher Purpose. The leaders of these “Small Giant” companies constantly and consistently remind their employees of their overarching mission; their purpose for being. The mission is different for each organization, of course, but in all cases it rises above and beyond profits. Profits become a way to fuel the mission, not the ultimate end objective.
Imperative Two: Remind people in unexpected ways how much the company cares for them. Whether it’s through education funds, exceptionally generous benefits, or allowing single moms to bring their kids to work, the companies studied in Small Giants go out of their way to make it known to their employees how much they (a) appreciate them, and (b) respect them. Keep in mind these are small businesses. They don’t have limitless cash. They do, however, understand the importance of their people… and they let them know.
Imperative Three: Build a culture of collegiality. As Burlingham is quick to admit, at first glance it may not seem that you as a leader have much control over how well your employees get along. And yet, the leaders of these small giants have been able to do just that. Whether it’s creating policies that help people feel more secure in their roles, creating opportunities for growth within the organization, or simply making sure everyone feels heard, the small giant leaders keep their finger on the pulse, so to speak, around the culture of collegiality.
Three imperatives, the summation of which create a culture in which employees genuinely care about the success of the business. The good news is, we can all create such environments. It’s not easy, but it is possible. Here are a couple tips to get you started.
“Though [small giant leaders] were consummate businesspeople, they were anything but professional managers. Indeed, they were the opposite of professional managers. They had deep emotional attachments to the business, to the people who worked in it, and to its customers and suppliers – the sort of feelings that are the bane of professional management.”
Small Giants, page xxxi
I find it sad that “professional” has somehow become synonymous with “detached”. Aloof and calculating may have worked well for Gordon Gecko in Wallstreet, but it doesn’t work in small business. Leaders of Small Giant companies care. Passionately and deeply, they care. They care about their people, their product, their clients, their community, etc. They genuinely, deeply care, and they’re comfortable showing it. Yes, it opens them up to the risk of pain and rejection. It also attracts employees, clients and fans.
What’s the Focus?
“‘We wanted to raise the bar,’ he said. ‘Instead of trying to do it all, we wanted to be the best at a few things. We physically gave up our licenses in other states so we couldn’t work there, and we went from taking every job to questioning every job.’”
~Bill Butler, Butler Construction
as quoted in Small Giants, page 39
In the case of all small giants, once they got to the cash-flow positive point, the focus became something other than growth. For some it was quality. For others it was staying in a certain geographic region, or certain hours. For Bill Butler, the motivation was to keep his head count below 150. He wanted to know the names of everyone in the company, and didn’t think he could manage that with more than 150 employees. This motivation forced Butler to be selective on which clients he worked with. The “exclusivity factor” (and subsequently the ability to charge more) was the result of following a different motivation, and not the original purpose.
There are many lessons and takeaways from Small Giants, but ultimately I think the biggest value for me was in the inspiration this book provided. Burlingham has identified hundreds (if not thousands) of businesses that have chosen greatness over size; purpose over profits. The irony of course being that all of the companies studied realize excellent profits compared to their peers. These companies have soul (or what Burlingham refers to as “mojo”), and they are an inspiration for the rest of us.