Learning From Literature

Small Giants by Bo Burlingham

Cover of Small Giants by Bo Burlingham

Small Giants: Companies That Choose to Be Great Instead of Big by Bo Burlingham is a business book published in 2005.

Large, publicly-owned companies and fast-growing technology ventures shape the modern-day idea of business. Conventional wisdom is that companies either grow or die — but many small, private companies don’t do either and are quite healthy. 

Burlingham identified “Small Giants,” companies that trade growth for being excellent at what they do. These businesses embrace the idea that the next level doesn’t mean a bigger level and prefer to focus on non-traditional goals such as high-quality customer service and improving community ties in addition to profits. 

Small Giant — Extraordinary, privately owned companies willing to forgo revenue or geographic growth in order to achieve remarkable ends. By extraordinary, the company had a distinctive vision and mode of operation that clearly set it apart from others in the industry

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Table of Contents

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Intro

Small Giants → Foundations promoting “mojo” (a strong, positive culture):

  • Don’t accept regular standards of success
  • Leaders remain in control & stick to true vision for the company
  • Exceptionally intimate relationship with local area
  • Exceptionally intimate relationships with customers / suppliers
  • Unusually intimate workplaces
  • Wide variety of corporate structures & modes of governance
  • Passion
A Culture of Intimacy 
  • Employee relationships are the engine of the company
    • People must love their work, team, and future opportunities
    • Feeling valued, supported, and empowered drives “mojo”
    • Leaders must show they care personally about employees
    • Hire people aligned with the company’s vision
  • Operations & culture need structure and soul
    • Build a simple, teachable system for managing work and solving problems
    • Deliver more than service – create a unique customer experience
    • Ensure strong internal communication and follow-through
  • Create a culture of intimacy
    • Lead with a clear higher purpose
    • Show care in unexpected, sincere ways
    • Foster trust, respect, and collegiality among employees
Free to Choose
  • You’ll face a key choice: how far and how fast to grow
    • The default is rapid, endless growth
  • Small Giants show the value of staying intentionally small
    • Prioritize control, culture, and quality over scale
Who’s In Charge Here?
  • Companies often drift from the founder’s original vision
    • Growth is constrained by limited resources: money, talent, research
    • Many sell out because they can’t self-fund expansion
  • Pressure for growth comes from multiple fronts – social expectations, outside investors, etc
  • Small Giants avoid this by keeping control in-house
    • Pursue values and success that are harder to quantify than just financials (culture, purpose, impact)
The Mona Lisa Principle
  • Small Giants are deeply rooted in their local communities
    • Business identity is tied to the local character
    • Each company reflects a unique, local personality
  • Community ties strengthen internal and external relationships
    • Leaders often emphasize social responsibility and giving back
Ties That Bind
  • Extraordinary Customer Relations
    • Word-of-mouth is the most effective marketing
    • Emotional connection with consumers drives sales
    • Prioritize being customer-intimate over simply customer-friendly
    • Tailored strategies based on location, business nature, and customer base
  • Employees at Small Giants
    • Hire for passion and caring, train for skills
    • Personal, respectful management style across all levels
    • Generous benefits (health insurance, 401(k) match, education programs)
    • Resulting in a warm, closely-knit corporate culture that resonates with customers
  • Relationships with Suppliers
    • Strong, intimate relationships beyond typical business interactions
  • 3 Pillars of a Sense of Community
    • Integrity – Company is transparent and trustworthy
    • Professionalism – Company fulfills its promises
    • Direct Human Connection – Emotional bond based on mutual care
Galt’s Gulch
  • Focus on the Big Picture
    • Define the desired future look, feel, and actions of the business
    • Small Giants share similar business approaches despite varied cultures and governance systems
  • Operational Practices
    • Hold weekly meetings for idea-sharing and personal connections
    • Effective systems prevent most issues when followed
  • Employee Relations
    • Distinguish between mistakes and carelessness (e.g., backing into a pole vs. crooked labels)
How Small Giants Fail
  • Key Factors for Long-Term Success
    • Steady Gross Margins
    • Healthy Balance Sheet
    • Sound Business Model: Clearly defines value delivery and profit generation
  • Adaptability
    • Business models must evolve with changes in circumstances, technology, and industries
    • Small Giants must adapt to market shifts like any other company
Pass It On
  • Chasing Growth vs. Focus
    • Prioritizing growth often leads to losing focus, efficiency, and profitability
    • Disciplined businesses that maintain focus can deliver superior, long-term returns
    • Customers should receive unique services that set the business apart
  • The Greatest Challenge: Maintaining Culture
    • Keeping the company’s “mojo” or culture alive is crucial, especially during leadership transitions or turbulent times
    • A clear, well-articulated vision must be ingrained in the day-to-day operations
    • Successful succession stories highlight how small giants preserve their culture
The Art of Business 
  • Entrepreneurs as Artists
    • Entrepreneurs are like artists in the business world, passionate about their work
    • “Mojo” in a company is impossible without passionate leaders
  • Value Beyond Profit
    • A company’s value cannot be measured by profit alone
    • Financial indicators are objective but chasing growth isn’t the only path to success
  • Passion for the Process
    • For companies with mojo, the process itself is the business
    • Passion for the process helps avoid the trap of solely chasing growth

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