March 8, 2006

News & Opinion: Bill and Bo on Small Giants

By: 800-CEO-READ @ 2:47 PM – Filed under: Management & Workplace Culture

I would love Small Giants even if I didn't know the author, Bo Burlingham. After all, Burlingham has been the co-author of several of the best business books of the past two decades, The Great Game of Business and A Stake in the Outcome, not to mention the force behind the editing and writing of literally hundreds of important articles for Inc. magazine.

As Burlingham said at a recent reading/discussion for Small Giants, "This book challenges people to think about what makes a great company." How? He focuses on 14 dynamic companies that all made conscious decisions not to growbut rather to control their size so as to concentrate on more important matters such as the soul of the company, the ties to the community, the community of employees, the quality of the work. In so doing the companies retained that quality of charisma that makes them so attractiveand which in turn drives so many great companies to make bad choices when faced with the tradeoffs from growth.

The huge crowd included Fast Company Founding Editor Bill Taylor, who posed Bo a provocative question. Bill (who recently completed a book of his own that will be published later this year) kindly shared his question, which follows. And Bo has been good enough to reply.

Here's Bill Taylor's question: It's easy to understand what your small giants gain by choosing not to grow as fast as they might. But did many of the entrepreneurs you chronicle--or did you yourself--think about what these companies give up by staying small? I'm not thinking about money, I'm thinking about impact--the chance to have a big effect on the world. Imagine if Herb Kelleher of Southwest had decided to stick to flying routes within the southwest. Or if John Mackey, the cofounder of Whole Foods Market, had decided to stop at a couple of stores in Austin, rather than spread across the country--and, in so doing, raise the bar for nutritional standards, the treatment of animals, the future of organics. Isn't it almost selfish, in a sense, or at least a missed opportunity, if you're a passionate company-builder who believes in what you're doing and thinks it's important, to do less than what's possible, to have less of an impact than you might have otherwise?

Bo Burlingham replies: First, let me be clear about one thing: In no way do I mean to suggest that a company cant be great if it grows fast, gets big, goes public, does acquisitions, and so forth. The two companies you cite are prime examples of great, publicly traded companies, although its worth noting that they are striking exceptions to the rule. They have been able to resist the pressures to compromise their values only because they have so far managed to deliver consistently great returns to shareholders, who have thus been willing to let the companys management teams operate as they see fit. Most other companies that have started out with similar valuesThe Body Shop, Ben & Jerrys, and People Express come to mindhave eventually been forced to make compromises that have utterly transformed their cultures and ways of doing business.

Its also important to recognize that there are always trade-offs. Although Southwest and Whole Foods are both great corporate citizens, neither one is rooted in a community anymore, and theyve both lost some of the workplace intimacy they had when they were smaller, not to mention the intense relationships with customers and suppliers. My point is simply that there are sacrificeslost opportunitiesno matter what you decide to do. Company owners have to choose which opportunities they want to focus on and which pressures they want to deal with.

That said, it may be true that a couple of the Small Giants owners/leaders have given up an opportunity to have a greater impact on the world by choosing to remain private and closely held and by staying (relatively) small. I say a couple because extremely few people are capable of building a Whole Foods Market or a Southwest Airlines without losing control of the company along the way. In any case, I certainly wouldnt describe the decision to remain small and private as selfish. For one thing, most of these people work extremely hard to make the greatest contribution they can to their employees, their customers, their communities, and the world.. Saying their decision is selfish implies that people who try to get their companies as big as possible, as fast as possible, are somehow being selfless, or at least less selfish. We both know that the motivations of company-builders, even the greatest ones, are far more complicated than that, and that altruism or selflessness seldom enters into the equation.