Take the Money and Run
Is there a new breed of entrepreneur rising? Building and leading companies large and small, foregoing revenue and geographical growth to focus on, of all things, being the best at what they do?
Is there really an emerging breed of entrepreneurs that don’t plan to build, or want to build the next Microsoft or Google, then “take the money and run"?
Take the Money and Have Fun
Is there a new breed of entrepreneur rising that has as a mission “take the money and have fun?" Entrepreneurs that want to build enduring companies, great places of employment, great products, provide great customer service ... and have fun too?
We'll find out in this interview with Bo Burlingham, author of Small Giants: Companies That Choose To Be Great Instead of Big.
But first …
It was a distinctive ring … a warning-bell ring. The ring I set for the one person I never want to hear from ... or ever answer.
But I had to.
It was, “answer the phone on the first ring” customer-service day at the company. I knew who was on the other end. I handled it professionally (after a brief moment of staid reflection).
Who was on the other line?
Perfidious, Perorating Perforator
The most exasperating, frustrating, obdurately obnoxious, perfidious, perorating perforator of corporate gobbledygook in known history - and most probably unknown history too. A person that could unleash a tornadic swirl of immeasurably long and undecipherable words lasting upwards of five minutes without taking a breath, or, making any sense whatsoever. Not even a miniscule pause, which is, in my opinion, always his most singular accomplishment, as I usually have no idea as to what he’s trying to say.
I’ll admit, however, that this person has the most impressive repertoire of corporate gobbledygook I've ever heard. He uses every acronym known to mankind, and possibly most extraterrestrials; a corporate gobbledygook automaton of epic proportions. The best there ever was … or will be.
Because of this talent, I dubbed him …
“CAL 9000” (Corporate Automaton Linguist - 9,000 pre-programmed acronyms for release upon the slightest provocation [such as breathing])
Hal had a personality.
I’d hoped changing my phone number and e-mail address 17 times over the last seven months would have discouraged him.
I picked up …
“Steve! I know you’re there. It’s me. Answer.”
“What?” I despairingly choked out.
“You know who this is?” asked
My silence, to him, assumed assent and consent.
“How have you been? I just took the helm of a new company!”
“What happened to … ”
“You mean my market-leading, universal, enterprise-content application tool with extensible, real-time, interactive, scalable, multi-alphanumerical particularities supported by multi-colored platforms?”
Note to Reader: To translate the above, please take a deep breath and visualize …
“Yes,” said I.
“Well, we got blinked in a tipping-point paradigm shift because of the politically mega-dynamic CRM, BPM, ECM, ERP-like, non-BI, WI-FI market space, game-changing, evolving evolution. Combined with some global leveraging incompatibilities, it made our projected cash flow go upside down in the futures market, and our equity became … ”
“No … the correct way to assess, analyze and actionably communicate the business-model position would be to say our revenue and profits were seamlessly outsourced to the competition,” said
“I thought competing against the PC might be tough.”
“To your credit, in retrospect, you may have had a strategic insight we missed. But you should have seen our PowerPoint presentations. Boffo! The best 109 slides of artistic business acumen ever created. I’ll probably revisit, rethink, reuse and recycle them in my new business.”
It’s hard having ears sometimes.
“But that’s not why I called. I wondered if you could tap into one of your experts.”
“To help me ‘Shoot the Donkey!’ HA HA HA HA. I made a funny. HAR HAR HAR. Used your meta-metaphor.”
For readers unfamiliar with Cal 9000’s “Shoot the Donkey” unfunny mucking-up of a metaphor, it refers to a classic scene in the movie "Patton" (based upon a true-life event) where the Seventh Army gets critically held up in battle on a bridge, by a cart-pulling donkey that has stopped and refuses to budge, totally blocking the bridge. Life and death are at stake. An MP struggles with the donkey and the owner, trying to get them out of the way.
The entire Seventh Army halts for this recalcitrant donkey.
General George Patton roars up, leaps out of his jeep, whips out his ivory-handled pistol, shoots the donkey, and immediately has it hurled off the bridge, removing the obstacle.
That classic scene not only revealed Patton's character in a cinematic way, but also embodied the great leadership principle of taking decisive action to remove all obstacles to fulfill one's mission.
“Not exactly. There was a clause in his will. It specifically said, “over his dead body would I ever get his company.”
Wow. I think
“I’m confused,” said I.
“I have a great lawyer,”
Plain questions and plain answers
make the shortest road out of most perplexities."
– Mark Twain
I’m no longer confused.
“Anyway, to get back to the topic, you think you might have an expert that could share some global-macro-micro–socio-economic, web 2.0, horizontally vertical focused, long-tail strategic visionings?”
“Let me explain. My grandfather wasn’t much of a businessman. He had his company for 30 years. Produced ‘okay’ revenues … over 100 million dollars for the last 25 years.”
I’m waiting for the downside.
“But he never tried to grow the company and go public. He thought big was bureaucratic and bureaucratic was bad.”
Hmm ... I surmise
“Grandpa preached, ‘Our customers are family.’ Is that old-time lameroo or what? He bragged that industry analysts always called his company ‘the absolute best’ at what they did. So what! The company never got big. And worse, it remained a private company for crapsola sakes. You can’t even get the media to cover a small private company.”
“What would you want the expert to discuss?”
“My visioning strategy.”
I couldn’t wait to hear this. After
“Go public. Get as big as possible, as fast as possible.”
“I hate to be a downer, but what’s wrong with the company the way it is? It’s profitable. Customers and employees are happy. You have any idea how tough running a public company is?”
“I read your article, “Give Me Liberty or Give Me an … IPO?” You used a bunch of well-researched facts to convolute, pollute and refute what everyone knows is an absolute … a truism. Bigger is better! Always has been. Always will be. Grow or die! You’re a negativist Steve. Give it up.”
Vows to never answer phone again
“Don’t you think there might have been a reason your grandfather kept his company the way it was?”
“Sure. No vision. No corporate acumen … he wasn’t a deep thinker like me.”
“ROLL?” asked I.
“Return on Living Life” – being able to create good jobs, giving substantial parts of his profits to charitable causes and pretty much being able to do what he wanted, when he wanted (on a small scale … remember he wasn’t a big public company). What kinda egalitarian, do-the-hokey-pokey, non-business business strategy sense is that?”
Hmm …. is it dense in here? Or is it just me?
“And Steve, get this, it’s weird. Cultish. Freaky really. His small but devout group of customers, vendors and employees wear t-shirts and hats with the company name on it. You’d think the company was a high-fashion clothing retailer. That’s the down side of being small. People think they’ve found something special.”
My silence deepens; my thoughts accelerate … to quickly ending the conversation.
“You know, I respected and loved Grandpa, but come on – he lived and breathed his company. What kind of strategy or life is that? You need to grow, grow, grow! Bigger, better, best! I have a vision! I’m going to build the next Google, flip, cash out, and retire.”
“Do you have an expert in mind already maybe?”
“Yes. I’ve heard about this guy, Mo Curlingham, who was supposed to have written a book about making small companies giants. Let’s see if Mo can help us ‘Shoot the Donkey!’ Uh-oh, the other phone is ringing, must be investment bankers. I must exit this conversation.”
A click never sounded better.
Never sounded sweeter.
Against my saner judgment, I decided to search for this Mo Curlingham and his new book. Did I mention that
Three Stoogian Freudian slips?
The author’s name was not “Mo Curlingham,” and his book isn’t really about transforming small companies to giants.
It’s about something better, much better - an emerging economic force, maybe new way of life, based not upon size, but choice.
ENTER: Bo Burlingham, author of “Small Giants.”
Bo is the author of “Small Giants: Companies That Choose To Be Great Instead of Big” and an editor-at-large of Inc. magazine.
The BUZZ on BO
Steve: What are Small Giants and why are they important?
Bo: In answering that question, I need to make a distinction between the criteria I used to choose the companies in my book and the characteristics that they had in common. I chose the companies first, and then I looked at the qualities they shared. The two were similar, and related, but not identical. I’ll start with the criteria. There were five of them.
First, I wanted companies that had had the opportunity to grow very fast, get very big, go public, go national, or whatever, but had chosen not to because they had goals they considered more important than getting as big as possible as fast as possible.
Small Giants have goals that are more important than getting big fast.
Second, I wanted companies that were considered to be the best at what they did by their peers and competitors - that is, the people in the best position to judge.
Third, I looked for companies that had been recognized outside the industry for their contributions to the greater good.
Fourth, I focused on companies that had been around long enough (10 years or more) to experience all of the ups and downs of business and had managed to remain profitable through thick and thin.
Finally, I realized that - because of the choices the companies were making - I would be looking at businesses that were private and closely held. After all, these were businesses that had decided not to make maximization of return on investment their number-one goal. That’s tough to do if you have outside investors.
So those were the criteria I used in selecting the companies. I found that the companies I selected had five characteristics in common.
Second, the companies had close, symbiotic relationships with the communities in which they did business.
Third, the companies cultivated personal, one-on-one ties with customers and suppliers. Nevertheless, I also found that the customers came second with these companies: The employees came first.
All of the Small Giants had what I call a culture of intimacy, which was the fourth defining characteristic.
The fifth one had to do with the attitude of the owners and leaders toward whatever it was that the business did: They loved it. They were absolutely passionate about it. They were so crazy about what they did that they wanted everyone they came into contact with to feel the same way about it.
Why are these companies important? Because businesses are the building blocks, not just of an economy, but also of a whole way of life. What they do and how they do it have an impact that extends far beyond the economic sphere. They shape the communities we live in and the values we live by and the quality of the lives we lead.
If businesses don’t hold themselves to a high standard, the entire society suffers. There are no businesses that hold themselves to higher standards than do Small Giants.
What’s more, it’s a standard that every company can aspire to, and many can achieve. As more companies become Small Giants, it can’t help but make our world a better place.
Steve: In your book you say Small Giants have mojo. How do you define mojo and how do Small Giants generate it?
Bo: I define mojo as the business equivalent of charisma. When a leader has charisma, you want to follow him or her. When a company has charisma, you want to be associated with it. You want to buy from it, sell to it, work for it, wear its hats and t-shorts, be part of whatever it’s doing. That’s mojo.
Small Giants generate their mojo by working very hard on the relationships they have with all the groups of people they come into contact with - employees, customers, suppliers, neighbors, and so on. The Small Giants realize that those relationships have a huge impact on a company’s success and must be maintained. If you get distracted and start to neglect the relationships, the mojo is lost, and the business is usually headed for trouble.
Steve: What are the benefits of buying or dealing with a Small Giant?
Bo: Well, do you want to buy from a company that treats you as another party in a commercial transaction or from a company that cares about you and what you want and will go the extra mile to see that you get it? Small Giants are fanatical about customer service. They don’t want a customer to be satisfied. They want the customer to be delighted.
They cultivate personal, one-on-one relationships with customers with the goal of understanding and providing them with whatever it is that they are looking for. That’s the benefit to the buyer: The Small Giants care.
Steve: I penned an article titled Give Me Liberty or Give Me an … IPO?” that lays out a case for remaining a private company. Do you think Small Giants will begin to proliferate because of the excessive drag and anti-competitiveness of regulatory burdens?
Bo: I think that there are many advantages to staying private these days, including the increased government regulation of the public equity markets. But more significant from a Small Giants standpoint is the emergence of a new generation of entrepreneurs with a business perspective dramatically different from that of the generations of 1980’s and ’90s.
Most of them aren’t out to build the next Microsoft, nor are they building to flip, cash out, and retire.
They want to build enduring businesses, great businesses, but not necessarily huge ones. I suspect that we’ll see a lot of Small Giants arising from their ranks.
Steve: Examples of some of the companies you profiled?
Bo: There are snapshots on my profile webpage.
Steve: Why is shareholder value so different in public and private companies/Small Giants?
Bo: As I point out in my book, the definition of shareholder value depends on who the shareholders are. If you’re a shareholder who has invested your savings in a public company because you hope to make money on your investment, you want the value of your stock to increase as much and as rapidly as possible. That’s why the vast majority of people do invest in public companies, so it’s natural to think of shareholder value in that context as a direct reflection of return on investment.
On the other hand, if you’re the 100% owner of a private company, you can define shareholder value any way you please. In that context, shareholder value is simply what you want to get out of the business. Maybe your number-one priority is to increase the value of your equity as much and as rapidly as possible, in which case, you’d measure shareholder value the same way that public company investors do. Then again, maybe ROI is third or fourth on your list of priorities. Maybe you figure you’ll maximize your ROI over the long run by focusing on building a great, enduring business. Or maybe you don’t care about maximizing your ROI as long as you have a great business you’re proud of and a great life you enjoy. In any case, it’s your decision.
You get the freedom to make that choice when you stay private - and that’s another reason why I believe a lot of owners are going to decide to keep their companies private in the future.
About Bo Burlingham
Bo Burlingham is the author of Small Giants: Companies That Choose To Be Great Instead of Big and an editor-at-large of Inc. magazine.
My story in brief: I joined Inc. in January 1983 as a senior editor and became executive editor six months later - a position I held for the next seven years or so. In 1990, I resigned and became editor-at-large for a number of reasons, including my desire to go back to writing. I subsequently wrote two books with Jack Stack, the co-founder and CEO of Springfield Remanufacturing Corp. and the pioneer of open-book management. One of the books, “The Great Game of Business” (Doubleday/Currency, 1992), has sold more than 300,000 copies. (It explains what open-book management is and how it works in practice at the company that does it best.) The other, “A Stake in the Outcome” (Doubleday/Currency, 2002), has also done pretty well and gotten great reviews. (It’s a book you should read if you want to know what it really takes to run an employee-owned company.)
Before joining Inc., I freelanced for various publications, including Esquire, Harper’s, Boston Magazine, and Mother Jones. I was also managing editor of Ramparts magazine for a while, if anyone can remember back that far. In 1982, I joined Fidelity Investments, where I wrote for Peter Lynch, Ned Johnson, and other honchos until coming to Inc. From 1992 to 1997, I served on the board of The Body Shop Inc., the