Small Giants, Bo Burlingham

Review

Company culture, an elusive ideal. Can you keep it once you start growing, and how? Lessons from a few companies, analyzed by the author.

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tl;dr

A Small Giant has “mojo”, a buzz about it and everyone wants to be a part of it. To build a small giant, you need to stay private and without outside shareholders. Stagnation is a threat to culture.

Small giants excel in customer service. But customers come second – people/employees come first.

Create opportunities for great people to grow and take on new challenges. Create an atmosphere in which people feel valued and respected but also make it possible for them to have fun at work.

You can only excel only at one value type: the best price, the best product, or the best overall solution. Each comes with its own kind of organization, culture and mindset.

In the end, to be successful, you also need: healthy margins, healthy balance sheet and a sound business model.

Summary

  • Staying private: control and time.
  • Small companies that have “mojo”, buzz. Excitement, anticipation, a feeling of movement, a sense of purpose and direction, of going somewhere. When people are in n sync with their market, with the world around them, and with each other.
  • Surveys about lost mojo, people answered talked about companies losing their creativity as they grew. About losing the emotional connection with the consumer. About losing authenticity and compromising quality. About becoming “too commercial” and focusing excessively on reducing costs. About ignoring the relationship with the community and failing to retain the culture. About getting too big too fast.
  • You can’t build a small giant if you’re in an industry where your success depends on how big your company becomes. You can’t have outside shareholders if you want to build a small giant.
  • Creating opportunities for employees and opening up new possibilities for the business were the goals. Most had done it by spinning off new ventures, often becoming entirely different entities in the process. The new ventures had the effect of giving good people an avenue to grow and take on new challenges without having to find employment elsewhere.
  • You could argue that a small giant’s mojo comes, in part, from an active appreciation of a business’s potential to make a positive difference in the lives of the people it comes into contact with.
  • Big emphasis on customer service. Enlightened hospitality means showing them that you care about them personally. You don’t want them just to be satisfied; you want them to be happy.
  • Create an atmosphere in which employees felt valued and respected but also to make it possible for them to have fun at work.
  • A company has to focus on providing one of three types of value to its customers: the best price, the best product, or the best overall solution. Each type of value calls for a completely different kind of organization, culture, and mind-set, so you would inevitably get in trouble if you tried to excel at more than one.
  • Customer comes second. People/employees come first.
  • “They wanted their businesses to be places where people could lead fulfilling lives, and they saw the quest to create such a business as a fulfilling mission in itself.”
  • If you want a company that cares, you need people who care, and they need to be motivated by more than money.
    • The first imperative involves articulating, demonstrating, and imbuing the company with a higher purpose.
    • The second imperative for creating a culture of intimacy involves reminding people in unexpected ways how much the company cares about them. The crucial word there is “unexpected.”
    • The third imperative concerns an attribute that, at first glance, you might think companies have little control over, namely, collegiality.
  • To be successful over the long term, the company has to have and maintain:
    • (1) steady gross margins that it protects,
    • (2) a healthy balance sheet, as reflected in the current, cash-to-debt, and debt-to-equity ratios, among other measures,
    • (3) a sound business model governing how the company delivers value to customers and earns a profit in the process.
  • It’s all written down. The owner’s job is to make sure the managers manage the systems.
  • “We have three bottom lines at Zingerman’s—great food, great service, and great finance.”
  • “I’d always thought that success was about retention rates,” he said, “but it’s not. It’s about bringing the right people in and exiting the wrong people at the right time.
  • What he’d learned was that the real threat to the culture was not dilution but stagnation, which could be avoided by taking advantage of the opportunities created by growth to continually improve the culture.

Further Reading

  • Setting the Table
  • open-book management (OBM)
  • smallgiants.org
  • Zingerman’s Guide to Good Leading
  • The Servant as Leader and The Institution as Servant

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