Small Giants: Companies That Choose to be Great Instead of Big

by Bo Burlingham

The team spent hours analyzing the customer base, noting which jobs were more profitable, discussing which niches Butler should be in and which clients played best to its skill set, projecting how economic trends would affect different industries, and so on. Then came the cuts.

The companies in this book are all deeply rooted in their communities, and it shows. Each has a distinctive personality that reflects the local environment, often in ways that may seem superficial or quirky on the surface but that actually play an important role in the business’s success. Righteous Babe is a good example.

All the companies in this book have similarly symbiotic relationships with the communities in which they’ve grown up, and the vitality of those connections is part of their mojo. The companies’ owners and employees have a strong sense of who they are, and where they belong, and how they’re making a difference to their neighbors, friends, and others they touch. In some mysterious way, all that contributes to buzz around the business, the passion people feel for what they’re doing.

“If someone finds a small screw in their risotto, they’re going to tell everybody they know,” he once observed to Gourmet magazine. “I can’t change that. But what I can do is make sure that when they tell the story they go on to say, ‘But do you know how the restaurant handled that?’ ”

And that speaks to the little secret behind the relationships that mojo companies have with their suppliers and customers. It’s generally not the people at the top of the organization who create the intimate bonds. It’s the managers and employees who do the work of the business day in and day out. They are the ones who convey the spirit of the company to the outside world. Accordingly, they are the company’s first priority—which, from one perspective, is ironic. For all the extraordinary service and enlightened hospitality that the small giants offer, what really sets them apart is their belief that the customer comes second.

“That’s the way my father raised our family, from the earliest moment. Lots of responsibility. We’re counting on you. We trust you. And if you screw up, just tell us about it; don’t worry about it. We’re not encouraging you to screw up, but for heaven’s sake, if you do, don’t worry. We’re all in this together, and we don’t know what we’re doing either, so come on and join in. And I always liked the idea of a small number of people. I just don’t like what happens in large groups.”

what others refer to as empowerment, but which people at Reell prefer to call teach-equip-trust, or ΤΕΤ.

“has shown us that the biggest misconception of American manufacturers is the belief that production workers are not dependable and must be motivated and/or constrained to do quality work,” he wrote in the official company history. “We have been amazed by the self-motivation and dedication to quality and productivity that they demonstrate when they are freed to develop and use their full potential.”

Robert K. Greenleaf Center) and embarked on a second career as a university lecturer, consultant, and author. Along the way, he had written a series of seminal essays on the theme of “servant leadership,” and they continued to resonate long after his death in 1990.

I had a guy who’d been with me since the beginning. He was messing up. What do I do? How much compassion can I afford? I’m not saying none. But in the course of being compassionate, you can’t relinquish your responsibility to be unmerciful when it’s necessary. “You know, life is unfair but merciful. You can do everything right and get a brain tumor. Business is unmerciful but usually pretty fair. People who go broke often bring it on themselves. For a company to succeed, everybody has to do their bit, and you have to insist on it. Like coming to work on time.

As the guy in charge, it’s your duty to make sure you have a profit.

“I tell people there are three stages to every business,” he said. “The start-up phase, the throw-up phase, and the grow-up phase. I went through ten years of being overwhelmed until I got things under control. I finally figured out that managing isn’t just about learning how to motivate people. It’s also about learning how not to demotivate them.”

“Finally it dawned on me that the VP I’d appointed had introduced a new concept: being laid back. He was babysitting, not managing. He’d created an environment where people weren’t concerned with rules and standards. They thought, ‘Oh, that’s Jay.’ I could see it in every division. People weren’t being trained. They weren’t being groomed. They weren’t being led. His approach was, ‘Make sure there are no problems; if there is one, I’ll help.’ If a kid puts a block in his mouth, you take it out. If the stove gets on fire, you put it out. You don’t ask, ‘Why did this happen? Who did it? What do they need to learn?’ He was creating an environment he was comfortable with, not the one I wanted. But it was my fault. I should have been building a management team. I went back to the manager I’d screamed at and apologized. She said, ‘I was getting mixed messages from the two of you.’ ”

But you can get away with leaving things vague and mysterious only if you make sure you’re ultimately in control, which means identifying—and holding on to—the critical levers of power.

Making mojo last, however, does not mean keeping the company the way it is, or was. Mojo does not insulate a business from the marketplace. Small giants must adapt to changes in the competitive environment just like every other business. Then again, they usually have an easier time of it, thanks to the same practices and beliefs that give them their mojo to begin with.

I don’t believe it’s possible for a company to have mojo without leaders who feel that way about what their companies do. If they don’t love the business, if they don’t feel that what the business does is vitally important, if they don’t care deeply about being both great and unique in providing whatever product or service they offer, nobody else will either. Granted, such passion exists to one degree or another in all entrepreneurial ventures, or at least the successful ones, as Bernie noted. The difference between the small giants and everyone else lies in their refusal to let go of the passion and their success in keeping it alive.

A company’s record of growth and the consistency of its financial returns may tell you something about the skill of its management team, but they say little about whether or not the business is contributing anything great and unique to the world.

servant leadership developed by Robert K. Greenleaf.

all have a clear understanding of who they are, what they want out of business, and why.

Eventually, you’ll probably want to have all of them—a mission, a vision, and a strategic plan—but the vision may be the most useful of the three, if only because it helps you decide what not to do, and—when it comes to building a small giant—knowing what to forego is as important as knowing what to undertake.

Mavericks at Work—a book I’d recommend to all Small Giants readers,

Raising the Bar: Integrity and Passion in Life and Business: The Story of Clif Bar, Inc.

The Street-Smart Entrepreneur: 133 Tough Lessons I Learned the Hard Way (Addicus Books, 1998), he managed

Purpose, and Profit: The Nine Naked Truths.

Zingerman’s Guide to Giving Great Service (Hyperion, 2004). You should also check out the seminars

I’d recommend Bruce Feiler’s excellent article on Union Square Cafe, “The Therapist at the Table,” which appeared in the October 2002 issue of Gourmet.

The Tune-Up

Managing with Carrots (2001), The 24-Carrot Manager (2002), and A Carrot A Day (2004), published by Gibbs Smith, Publisher, in Layton, Utah; and The Invisible Employee: Realizing the Hidden Potential in Everyone (Wiley, 2006). All the books are filled with excellent advice about recognizing and rewarding employees.

The essential book on employee ownership, for example, is Equity: Why Employee Ownership Is Good for Business by Corey Rosen,

For more about open-book management, check out The Great Game of Business: Unlocking the Power and Profitability of Open-Book Management(Currency/Doubleday, 1992), also by Jack Stack and me, as well as Open-Book Management: The Coming Business Revolution (HarperCollins, 1996) and The Open-Book Experience: Lessons from over 100 Companies Who Successfully Transformed Themselves (Perseus,

Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean (Harvard Business School Press, 2006)

small giants—especially his booklets Servant as Leader and The Institution as