Description

"Small Giants" by Bo Burlingham

Main Theme: The book explores the idea that business success doesn't always equate to massive growth. Some companies deliberately choose to remain "small giants," prioritizing other values like meaningful work, strong company culture, deep customer relationships, and community impact over relentless expansion and maximizing profits at all costs. The book investigates what makes these companies unique and successful.

Key Ideas and Facts:

• The Choice: The foundational idea is that businesses have a choice about whether or not to pursue relentless growth. As Fritz Maytag of Anchor Brewing realized, a company can be "a small, prestigious, profitable business, and it would be all right. Like a restaurant. Just because it's the best around doesn’t mean you have to franchise or even expand. You can stay as you are and have a business that’s profitable and rewarding and a source of great pride. So we made a decision not to grow... This was not going to be a giant company—not on my watch.”
• Mojo: The author identifies a hard-to-define quality that these "small giants" possess, which he terms "mojo." This mojo is often described by employees in terms of its effects, such as, "'You got that engine running baby and the sky is the limit!'" This "mojo" seems to be generated by a combination of factors.
• Community Connection: Small giants are often deeply rooted in their communities. This connection manifests in various ways, from Righteous Babe's reflection of Buffalo's underdog spirit to Zingerman's Deli's close relationships with local customers. Danny Meyer of Union Square Hospitality Group emphasizes the importance of context, stating, "I don’t want to do a new project unless it’s special in some way, and that means the context has to be right... Those restaurants are part of their community, and the community is part of what they are. They wouldn’t fit in in Las Vegas, given the transience of the people and the nature of the place. It’s the wrong context.” This connection is also evident in the companies' support for local initiatives and charities, often done quietly.
• Intimacy: The concept of "intimacy" is highlighted as important for small giants. "We have a chance to be part of a community in a way you simply don’t get if you’re in a big company that’s spread out all over the place," says Weinzweig of Zingerman's. This intimacy extends to customers, employees, and suppliers, fostering loyalty and a sense of shared purpose.
• Importance of Financial Health: The book doesn't dismiss the importance of financial stability. It emphasizes protecting gross margins, maintaining a healthy balance sheet, and having a sound business model. "Even after paying down some of the accumulated debt during the profitable years before the recession, Sarillo still owed about $3 million. The interest alone came to more than $150,000 per year, and the company was losing about $30,000 a month."
• Employee Focus: "Small Giants" also emphasizes the importance of investing in employees and creating a positive work environment. This can range from unique reward systems, as exemplified by CitiStorage's "knock-your-socks-off policy," to offering educational opportunities and fostering camaraderie through company events. As Brodsky stated, "Anybody who works here for a year can go to school, and we’ll pay for it as long as you earn a B or better.”
• The Role of the Founder: The founder's personality, values, and passion are critical to the identity and success of "small giants." The book acknowledges that it can be difficult for these companies to survive without the founder. Selima Stavola had "absolutely no interest in turning it into a business that someone else could own. She would first have to destroy everything she loved about the company she had built, a self-defeating exercise if ever there was one."
• Passion and Creativity: All of the leaders in the book share a "passion for what their companies do. They love it, and they have a burning desire to share it with other people. They thrive on the joy of contributing something great and unique to the world."
• Dealing with Growth Pressures: The book addresses the challenges that businesses face when pressured to grow. It acknowledges the psychological allure of growth as an indicator of success, but also cautions against blindly pursuing it without considering the potential consequences for company culture, quality, and values.
• Social Responsibility: The businesses profiled demonstrate social responsibility through their ties to the community and the environment. However, most leaders avoided using their "good works" as marketing tools.

Examples of Companies and Leaders Mentioned:

• Anchor Brewing (Fritz Maytag): A key example of a company that chose to remain small and prioritize quality and tradition over massive expansion.
• Clif Bar (Gary Erickson): A company that resisted acquisition and prioritized ownership and control.
• Zingerman's Deli (Ari Weinzweig and Paul Saginaw): Known for its exceptional food and strong community ties.
• Righteous Babe Records (Ani DiFranco and Scot Fisher): A record label that embodies the spirit of its community and prioritizes artistic integrity.
• CitiStorage (Norm Brodsky): Demonstrates how even a seemingly mundane business can be built with creativity and a focus on employee well-being.
• Reell Precision Manufacturing (Bob Wahlstedt and Kyle Smith): An engineering company that values quality and ethical decision-making.
• O.C. Tanner Company (Obert Tanner): A company focused on employee recognition.
• University National Bank & Trust Co. (Carl Schmitt): A bank focused on limiting growth.

Potential Areas for Further Exploration:

• The specific strategies these companies use to manage growth and maintain their unique cultures.
• The challenges of succession planning in founder-led "small giant" companies.
• The role of employee ownership and participation in creating a strong company culture.
• How "small giants" balance profitability with their commitment to other values.

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