Small Giants: Companies That Choose to Be Great Instead of Big [Englisch] [Taschenbuch]

During a GE annual meeting when discussing entrepreneurial companies, Jack Welch explained why he admires them: "For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy."

Presumably Bo Burlingham agrees with Welch, perhaps adding that the size of a company such as GE does not determine whether or not it has these characteristics. Rather, he would identify 14 companies which he calls "small giants." They range from Selima Inc. (a two-person fashion design and dressmaking firm) to O.C. Tanner (a company with 1,700 hundred employees and annual sales of $350-million). Although quite different in size and nature, Burlingham has identified seven common threads:

"First, I could see that, unlike most entrepreneurs, their founders and leaders had recognized the full range of choices they had about the type of company they would create."

"Second, the leaders had overcome the enormous pressures on successful companies to take paths they had not chosen and did not necessarily want to follow."

"Third, each company had an extraordinarily intimate relationship with the local city, town, or county in which it did business -- a relationship that went well beyond the usual concept of `giving back.'"

"Fourth, they cultivated exceptionally intimate relationships with customers and suppliers, based on personal contact, one-on-one interaction, and mutual commitment to delivering on promises."

"Fifth, the companies also had what struck me as unusually intimate workplaces."

"Sixth, I was impressed by the variety of corporate structures and modes of governance that these companies had come up with."

"Finally, I noticed the passion that the leaders brought to what the company did. They loved the subject matter, whether it be music, safety lighting, food, special effects, constant torque hinges, beer, records storage, construction, dining, or fashion."

No doubt there are countless other companies which also meet these criteria. Insofar as they and the 14 "small giants" which Burlingham discusses are concerned, nature of business is as irrelevant as size. If I understand Burlingham correctly, they are driven by the determination to be the best at what they do, to have close ties to their communities, to create a great workplace environment, to provide excellent service to their customers, and to be terrific customers to their suppliers. They regard profitability as a by-product of doing those initiatives. They wouldn't normally reduce an area of their operations to increase profitability (although sometimes they might have to). If they reduced it at all, it would be to achieve those other goals.

Burlingham suggests that his book be viewed as a "field report" on a group of extraordinary companies, each of which has (his word) "mojo" which he discusses on page 195. Although "small giants" may not be the backbone of the American economy, they are "its heart and soul, and they are setting a new standard for excellence on Main Street." When concluding this brilliant book, Burlingham asserts that businesses "are the building blocks, not just of an economy but of a whole way of life. What they do and how they do it have an impact that extends far beyond the economic sphere. They shape the communities we live in and the values we live by and the quality of the lives we lead. If businesses do not hold themselves to a high standard, the entire society suffers." Well-said.

Frankly, I envy those who have not as yet read Small Giants because, among its many benefits, it offers an eloquent, indeed compelling affirmation of values we should but do not always live by. With all due respect to Burlingham's business acumen, I appreciate even more his obvious faith in what can -- and should -- be accomplished if more of us became "small giants" of decency and integrity. It is no coincidence that many of those on Fortune's annual list of the most highly-admired companies are also on its list of those most profitable.

Burlingham urges his readers to visit www.smallgiantsbook.com where he plans to provide a form by which they can nominate other companies also worthy of recognition as "small giants." Leaders of the original 14 will then select the next group which will be recognized in Inc. magazine at which Burlingham serves as editor at large.

Those who share my high regard for this book are urged to check out Jason Jennings' Less Is More and Think Big, Act Small as well as Jim O'Toole's Creating the Good Life, Michael Ray's The Ultimate Goal, David Maister's Practice What You Preach, Robert Tomasko's Bigger Isn't Always Better, Michael George's Fast Innovation, and Yoram (Jerry) Wind and co-authors' The Power of Impossible Thinking.

As an entrepreneur, I can relate to the business situations, tribulations, and growth pains described in this book. "Small Giants" presents various aspects of business in the life of an entrepreneur through the stories of several businesses of various sizes, types, and positions in their life cycle. Among the requirements the author used in selecting them was the idea that the private owners had made a choice to be a certain kind of business. They had the opportunity to go public or grow through franchising or grow by taking on a level of project that would require them to scale and transform into something new, but when faced with this they decided to do something else. Why and for what? The author, Bo Burlingham, also looked for companies that were admired and emulated in their own industries. And he also looked for companies that had been cited for recognition by third parties.

The book is arranged by various topics rather than by business. He draws in examples from a few of the businesses in each chapter as appropriate to illustrate the point he is making. The first chapter, "Free to Choose", discusses the realization that each of these businesspeople had that they did not have to follow the public corporation path of going public, or giving up what they loved doing in order to pursue the maximum bottom line profit. It is interesting to see what conclusions each of them came to and the direction they chose. The second chapter discusses the various approaches various businesses take to "bosses". Some of these guys run the business themselves from a strong center. Others are very egalitarian and try to delegate a great deal. There is a fascinating range of approaches to this issue.

The third chapter discusses the idea of uniqueness. That some of these businesses cannot translate all that well into another company. The analogy is that if you moved the Mona Lisa to another museum and put it in a different frame, it would become a different experience even though it was the same painting. Another interesting point and in fact it can become a competitive advantage for certain businesses when this is understood.

The fourth chapter discusses how various of these small giants build ties to their local communities and to their customers. Again, it becomes a competitive advantage, but for many of these businesspeople it is much more about their quality of life and how that grows out of why they run the businesses they do and why they run them the way they do. The results seem to be much more of a piece of a single vision than a calculated tactic derived from studying Porter's Five Forces chart.

The fifth chapter turns inward and discusses the culture of intimacy many of these businesses have with the employees and their customers. It isn't just about knowing them and being friendly; it is more about making sure they have a great experience and feel good about coming to work and coming back for another meal, or making another purchase or giving another order. It is about being flexible enough to meet the needs of the person as much as possible. The sixth chapter is about the same kind of thing, but from the owner's point of view. What is it about the business that delights them, that makes them want to get up everyday? What is it about their business that they want to preserve so much that they give up the standard growth and profit models to have?

The seventh chapter deals with succession. Who owns the business? The people who own the stock or the people who carry on the spirit of the company? It is not necessarily straightforward for someone who cares about the values of the organization they built. On the other hand, business is constantly changing and nothing can be preserved forever. Also, as one of the "stakeholders" pointed out about their employee ownership program, "If someone were to come along and offer $200 per share, we would have to look at it." So, the founder's dream is for sale even by those sworn to carry on his or her dream; if the price is right. If that is so, then it is hard to fault the founder the heirs from taking the same point of view, is it?

The last chapter is called "The Art of Business", but should really be called "The Art of Living a Great Life Through Building The Right Business", but that would be too long. The basic idea is that these small giants contribute a lot to the culture and well being of everyone associated with them. More people should think about building them and realize that we aren't all destined for being cogs in the large-corporation machinery. It is a nice way to finish up this very fine and, I believe, important book.

Thanks to Bo Burlingham for writing it!

Thanks to YOU for reading it and CONGRATS to those of you who have the guts, courage, and tenacity for building your own small giant!

I read a lot of business books. I find it interesting to hear the different lessons that people get out of a business book. My take-away on this book is the importance of the relationship these businesses have with their communities. When I finished reading Small Giants, I thought of my own company and what it would be like if we got really big and left the town we grew up in. We have been a part of our community for over twenty-five years. Our associates appreciate where we live and actively participate in charities, social programs, civic boards, and public services that allow us to give something back to a community that has been very good to us. I wondered whether we would still be as active and committed if our company became too big to remain in one city and had to spread out around the country. I don't think so. There have been a lot of really big companies that started small in a hometown, made great contributions, and left great legacies, but then moved on and lost that connection to their communities. It made me sad to think of what they'd left behind, and what we might leave behind if our company, SRC Holdings, eventually took the same path.