Small Giants: Companies that choose to be great instead of big

Author: Bo Burlingham

I always wonder why companies want to grow big so fast. I saw many small-scale businesses in villages and cities that have been running profitably for a decade. Why they did not think about growing so fast.

This book has answered some of the questions and gave me a new perspective on how to be a great company instead of big.

The author selected and interview 14 companies as small giants who had an opportunity to grow big but stayed small.

To define small is very subjected. In the book small is refer is to the number of employees in the company which can be operated at human scale. The book has an example of companies ranging from 2 employees to 1400 employees and was still human scalable.

All these companies shared mysterious qualities or a combination of factors which the author describes as companies MOJO. The book is an observation about these MOJOs.

There were 7 common threads among these companies which can identify as their MOJO.

  1. The leadership knew what type of company they want to create. They had allowed themselves to question the usual definition on success in business.
  2. The people were in charge and control of the company and were able to overcome the enormous pressure of growing big shaped by outside forces.
  3. The company had an extraordinarily intimate relationship with the local city, town, or country in which it did business. These companies and have been part of this community and played an important role in the community.
  4. An intimate relationship with customers and suppliers.
  5. Created an intimate workplace where people care about the craft and each other. People who work there are passionate and proud about their work and will stand by the company through thick and thin as long as they hold up their end of the bargain.
  6. Freedom to develop their management systems and practices. It’s not that these companies did not face any challenges as most with other businesses. But they always come up with a solution with the unique style of management and handling finances.
  7. The passion that leaders brought to the company.

The book was originally published in 2005. I read the revised section of the book which was written on its 10th anniversary in 2015 which had few additional chapters.

One of the chapters was on the reflection on the 14 companies selected in the book on which some of them failed or sold and some of them got big.

The author described the 3 major reasons why these companies failed.

  1. Cash flow. No company can remain a small giant if it lacks the cash to pay its bills.
  2. Change in leadership. Some of the companies lost trust in the change of leadership. You can’t be a small giant without trust.
  3. Stuck to a culture based on a business model which is now not sustainable. Small giants must adapt to changes in the competitive environment just like every other business.
    One of the examples was from Reel manufacture which had a culture of not laying off people which lead to a problem when business was down and they are not able to cut their expenses.

That’s all. It was an amazing read and highly recommend it.

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Highlighted Quotes

  • If you want a company that cares, you need people who care, and they need to be motivated by more than money.
  • Your growth is absolutely limited by your capital, or your ability to borrow capital.
  • The most intense pressure often comes from two sources that both determine and define your success as a business, namely, your employees and your customers.
  • The notion that bigger and more-is better has so pervaded our culture that most people assume all entrepreneurs want to capitalize on every business opportunity, grow their companies as fast as they can, and build the next Google or Facebook.
  • You could be doing bonus plans, holding rallies, having parties to build morale. Then you scream at someone and throw it all away.
  • The secret to business can be summed up in two words: ‘leverage’ and ‘control.’
  • People don’t live up to their résumés.
  • When you are out of cash, the greatest culture in the world won’t save you.
  • It’s less expensive to let people figure it out for themselves than to send them to school to learn it.
  • 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.
  • For all the money the world, people can’t give you the ability to say, ‘No”
  • What has inspired business leaders, I believe, is the recognition of the range of choices they have in deciding the kind of company they want to create.

Thank you for taking the time to read my short book summary.

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