Small Giants: Companies that Choose to Be Great Instead of Big

by Bo Burlingham

Portfolio, 2005

As you can see, this is not a new book–bordering on 10 years old–but it’s worth a review, because it has some really good ideas in it, backed by good research. The basic (and refreshing) premise is that not all companies need to be big, that growth is not necessarily an objective. This runs counter to the dominant culture in business, and it is completely unacceptable in the realm of public companies. Shareholders demand growth. This is particularly important, since much of the business literature is based on research on public companies. This make sense, because as public companies they are required to make data on their business public (this helps researchers a lot), but it causes a problem, because now most of the conclusions about what makes companies awesome is based on companies that are slaves to growth.

So Burlingham picked a number of companies that intentionally stayed small and avoided IPOs, yet have created amazing and profitable businesses in the process. A couple of his conclusions were very interesting to me. First, there was a theme around “intimacy.” These companies all had an intimate relationship with the town in which they were located. Even as they did grow beyond an original location, it mattered that they were essentially local. They also had intimate relationships with their customers and their suppliers. And the leaders took the lead by being “highly accessible and absolutely committed to retaining the human dimension of the relationships.” And they had intimate workplaces too. They paid attention to a broad range of their employees’ needs.

Second, they did management differently. There were all sorts of corporate structures in this group of companies, and the leaders were decidedly NOT professional managers. It wasn’t that any of them had discovered “the” answer to management, but they were all willing to disregard the status quo answers (and succeed in the process).

The case studies are interesting, explained in depth, and sprinkled throughout the chapters which makes for an enjoyable read, as well as an enlightening one.