Meeting Recap: / Executive Forum | Bo Burlingham
Presenter: Bo Burlingham: Author, Small Giants:Companies That Choose to Be Great Instead of Big, editor-at-large of Inc. magazine, contributing writer at Forbes
Hosted in partnership with the HR Leadership Group of Northeast Ohio
Sponsored by Hiring Optics
Executive Summary: What exactly is it that makes a company great? That was the question that Bo Burlingham explored in his bestselling book, Small Giants:Companies That Choose to Be Great Instead of Big,about 14 small-to-midsize, privately owned companies that are widely acknowledged as being the best at what they do and that have been singled out for their extraordinary contributions to their communities. He found that they all had what he calls mojo—an elusive quality that makes them irresistible to customers and employees alike. Their mojo, he showed, comes from six characteristics they have in common. In this presentation, Burlingham talks about those characteristics and describes the specific techniques that companies use to generate mojo. Bo Burlingham is an editor-at-large of Inc. magazine, contributing writer at Forbes, as well as the author of Finish Big: How Great Entrepreneurs Exit Their Companies on Top; the co-author with Norm Brodsky of The Knack; and the co-author with Jack Stack of The Great Game of Business and of A Stake in the Outcome. Learn more about Bo Burlingham.
Key Takeaways:
What makes a company great?
When a company has MOJO, you want to work for them. You want to do business with them. You want to be in the presence of greatness. MOJO is the business equivalent of charisma.
Zingerman’s Delicatessen Example: Zingerman’s was at a crossroads. They had built a widely publicized, successful deli in Ann Arbor, renowned for its corned beef sandwiches. The company had an emphasis on education, flavor, tradition, and the integrity of ingredients. The opportunity presented itself to franchise the highly successful deli to take it nationally. But the founders didn’t want to leave Ann Arbor or travel to places to do quality control on delicatessens that weren’t up to snuff. So instead of embarking on a franchise, they chose to develop a community of businesses in the Ann Arbor area that were in keeping with the concept of the deli, just with different foods. These included a bake house, coffee company, creamery, candy manufactory, and mail order. Each was unique, impacted Ann Arbor and was able to attract quality people.
Are there companies out there that choose to be better rather than big? It turns out they are all over the place. Six criteria:
- Owners are at a crossroads. They’ve built a successful business; what to do next?
- These are great companies; among the best at what they do.
- Companies are singled out for what they contribute to their communities.
- Consistently profitable for 15-20 years.
- Human scale: People throughout the organization know each other.
- Companies have MOJO.
- Vision factor: Leaders have a clear idea of who they are and what they do.
- Most important quality is that the entrepreneur knows who they are, what they want and why
- Examples: Zingerman’s chose not to do a national franchise. Anchor Brewery said no to an IPO because they didn’t want to fundamentally change, launching the craft beer revolution. Cliff Bars said no to $120MM buyout from Quaker Oats because the prospective new owner wanted to move the company and get rid of the employees.
- Rooted in their communities
- Example: Union Square Café -- soul of the community is part of its business.
- Cliff Bars -- 2080 volunteer hours; leave no trace (don’t litter); partner with other companies to volunteer in the community
- Personal ties with customers and suppliers
- Enlightened hospitality
- Know the customer
- Example: Annie DeFranco set up own record business, Righteous Babe. All fans get a personal note if they send in fan mail.
- Build personal relationships with customers
- Employees come first; customers second. If employees are well taken care of, they will take care of the organization’s customers.
- Caring for people in the totality of their lives
- Example: SRC, a buyout of a failed division of International Harvester. How to turn it around? The solution was simple and sensible: turn business into a game. This new approach to running a company was called Open-Book Management and was later coined “The Great Game of Business”. Through using this approach, SRC has become a thriving company of over 1,200 engaged employees in more than 17 business units across a variety of industries. This once struggling company with a stock price of only ten-cents per share in 1983 is worth over $199 a share today.
- Sound business model.
- Protect gross margins
- Develop a sound business model and be willing to change if circumstances require it
- Cultivate a healthy balance sheet
- Passion factor:
- “We love what we do!”
- Soul of the artist whose means of expression happens to be business
Reminders: / Economic Forecast with Ken Mayland - Nov. 17
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Resources: / Presentation Slides
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