11.07.08

Small Giants

Small Giants outlines a refreshing trend of what its author calls ‘a new class of great companies’ who have consciously chosen a way of business that embraces notions of profitability and in some cases employee profit sharing while maintaining an equal focus on other non-financial priorities such as community service, being the best at what you do, embracing life/work balance, and creating a great place to work. By remaining privately owned and thus not beholden to the bottom line needs of shareholders, these companies have replaced the rapid growth cycle so common in corporate America with a set of characteristics that makes them truly unique in today’s business landscape. These are what Bo Burlingham refers to as small giants.

Each small giant, he purports, has a certain mojo that helps define it as such. What makes up that mojo differs from company to company but recurring characteristics tend to be a strong commitment to employees, community service, charity, life/work balance, flexible rules and regulations, and a general open book policy about management. The businesses profiled have incorporated different practices into the fabric of their respective company cultures but the end result is a trend of happiness and fulfillment in the workplace for all involved, a community that respects them, and committed employees who stay on for the long haul. Each of these elements contribute to the organization’s overall long-term success and the mojo of which Burlingham speaks.

Unique Approaches
The case studies range from companies as small as a single person to those with thousands of employees. Some companies, like Righteous Babe Records, Anchor Brewing or Clif Bar & Co., are product-focused while others, such as CitiStorage, or Chicago’s own The Goltz Group, owners of Artist’s Frame Service on Clybourn, offer services to their clientele. Each company’s approach to business is unique, their structures differ wildly from one to the next, and they couldn’t be more divergent in terms of what they sell, but all maintain a commitment to the communities in which they do business as well a razor-sharp focus on customer satisfaction and building long-term relationships with their clients.

Going Public
Another thing that all these companies have in common is that they have consciously decided against going public. They have rejected opportunities for expansion and profit in exchange for freedom and control. For some that decision was fraught with difficulties. Gary Erickson of Clif Bar & Co. was offered $120 million by a “midwestern food conglomerate” that some have identified as Quaker Oats in early 2000. On the day of the deal he backed out in the name of independence and ended up having to pay his then partner $65 million over five years at a time when he had only $100,000.00 in his bank account. Yet somehow in an atmosphere giant food conglomerates out to crush it, Clif Bar & Co. more than doubled its sales to $92 million in just a few years without taking on any outside investors or expanding its workforce. For Erickson and others in the book, decisions like these, difficult though they may be, are well worth it.

“In business, after all, it’s easy to confuse size with greatness,” Burlingham says, “and getting bigger and getter better. When you stop and think about it, the connections between the two are tenuous at best, but--with all the attention paid to getting big and growing fast--it’s easy to understand why most of us tend to equate them. By deciding to go for greatness rather than bigness, the small giants remind us that the two are not the same...”

Required Reading
This book should be required reading for any would-be entrepreneur, small business employee or MBA student. Though I am a business owner, I don’t often get excited about reading purely business-related books. In my off-time I’d much prefer to read about design trends or learn a new After Effects or Flash technique, or better yet dive into a good novel or short story collection (it’s that life/work balance thing). Small Giants is a notable exception, however, one that has reinvigorated my aspirations for both life and work and helped me reconsider what I want out of each.

Barack Obama said in his presidential acceptance speech “Let us remember that, if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers.” Companies like those outlined in Small Giants have already taken a massive leap forward in making this statement a reality. I hope that I can as well.

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