In a recent Vistage meeting, we talked about small business growth, and the inescapable challenges with growth and its impact on cash flow, profitability and culture. At Vistage, we talk about growth all the time. Growth is one of our “sacred” principles. We are proud that Vistage member companies outgrow their industry counterparts, who are not Vistage members, 2.2 times faster.
Growth is good. But growth is also hard. And maybe not always the best goal or route to take.
“Small Giants” are remarkable and fascinating companies who have chosen to focus on being Great instead of Big.
I rarely promote books in my writings, but Small Giants, by Bo Burlingham will be one of my exceptions. This book is a fantastic read for business leaders of any sized organization. In a similar way that Jim Collins studied large companies in Good to Great, Bo studies 14 successful small businesses to figure out why they are great, and why and how they chose NOT to grow, at least in the traditional sense of growth. And I am convinced that there are many others like them in our economy.
Size and growth rate aside, these small giants share some very interesting characteristics. They are all hyper focused on being the best at what they do. Most have been recognized for excellence by independent bodies inside and outside their industries. All have had the opportunity to raise outside capital, grow very fast, do mergers and acquisitions, expand geographically and generally follow the traditional route that made others successful. But they chose to stay on the road less traveled.
They also demonstrated the following five characteristics:
- Unlike most entrepreneurs, their founders and leaders recognized that they had a full range of choices about the type of company they could create. They questioned the usual definitions of success. They also resisted the usual pressures to go public, expand quickly and geographically as most successful companies do.
- Each company had an extraordinarily intimate relationship with the local city, town or county in which it served — a lucrative business relationship that went well beyond the usual concept of “giving back.” This aspect of the companies was unique and insightful.
- They cultivated exceptionally close bonds with customers and suppliers, based on personal contact, one-on-one interactions and mutual commitment to deliver on promises.
- The companies also had unusually intimate workplaces that strove to address a broad range of their employees’ needs as human beings. They also came up with a variety of corporate structures and modes of governance. Creativity and flexibility were important. There was no magical organizational template. But they worked diligently to determine what worked for them.
- The leaders of these companies brought passion to what the company did.
By Michael Malone