Bigger is not always better.
Sure, the Jack Welch saying that a company needs to be No. 1 or 2 in its market to matter may be good advice for a larger company, but it is totally irrelevant to the smaller, private firm, says Bo Burlingham, editor-at-large at
magazine and author of
"So much of what we read about business is related to large, publicly traded companies, which really constitute a tiny percentage of all the businesses out there," the author says. "But there are literally hundreds if not thousands of companies that actually do strive to be great, instead of big."
So what exactly is it that makes a company great? This is the question many readers find themselves asking after they read
In the end, people will come up with different answers to that question, but what Burlingham says he has found is that the 14 great companies he talks about in his book all share the "business equivalent of charisma,
or mojo," as he defines it.
"When a leader has charisma, you want to follow him or her," Burlingham says. "When a business has charisma, you want to be associated with that business."
All the businesses in the book, he says, have five qualities in common, which make up this mojo. First, they are all companies owned and led by people "who had a clear understanding of who they were, what they wanted out of their business and why."
Second they are companies that had "very, very close relationships with the communities in which they did business," Burlingham says. "Not only did they give back to those communities, but the communities molded the personality of the business."
Next, the companies have cultivated "very close, intimate, one-on-one relationships" with their customers and suppliers. The fourth characteristic has to do with the business owners' relationships with employees.
"The irony was that as close as these companies were to their customers, they believed that their customers come second and the employees come first ... because once you get above a certain size, it's the employees that have the relationships with the customers and suppliers and so forth," Burlingham points out. "They realized that if they wanted to deliver to their customers the kind of experience that they considered important, the employees needed to feel that same passion for the business that they themselves did."
To view Hema Oza's video take of today's small-business segment, click here.
The last shared quality Burlingham found is that all of these companies were led, run and owned by people who were absolutely passionate about the business they were involved in. That passion, he says, "was a key part of the whole thing."
This is not to say that these characteristics are the definition of greatness, Burlingham explains. It's just that "these were all people who had decided in their own mind what a great company was and they were striving to achieve that greatness."
"Somebody else might have a different definition of greatness, which is fine," he continues. The point here is that business owners have a choice.
primarily for those who own businesses and are constantly bombarded with advice that they needed to grow faster and get bigger to succeed -- it may be well-intentioned advice, but that's not the only option. "Basically I wanted to tell them that that's not true and that they have a choice," he says. "There are a lot of private companies that are neither growing nor dying."
Sure, small companies have to make trade-offs, but there are also trade-offs for being big, Burlingham says.
Whole Foods Market
, for example, is a company that the author says he greatly admires. The company started off as a small giant in Austin, Texas, decided to become a public company and now it's a national presence.
While Burlingham considers Whole Foods a great company that has done notable things for its communities and had a huge impact on eating habits, he believes it's given up a lot of its intimacies.
"They're no longer routed in one community, like they were when they were in Austin," he says. "They no longer have that intimacy of a workforce that they had back then, and no longer have those very tight relationships to their individual customers that they had."
But in return the food retailer has gained an international brand and the ability to influence on a grand scale. "Basically, if you are a small giant and you want to have influence you have to find it in other ways," Burlingham says. "Some of the companies in my book have had a lot of influence, but it has been more through their example than it has been though their ability to change a market."
The most important thing Burlingham wants small-business owners to take away from his book is the realization that they have a choice, and that successful business is all about choices.
"There's nothing in business that requires it for you to run it this way or that way," Burlingham says. "You have to be profitable, or have positive cash flow, but beyond that you have an infinite number of choices as to the type of business you want to create, what you want that business to do, what you want it to stand for, the role that you want to play in the lives of your customers, your employees, communities and so forth. That's worth paying attention to."