It’s hard to trace the definition of small giants to a single author. Both Bo Burlingham and Doug Tatum have written extensively about small giants in the business sphere, with their books ‘Small Giants: Companies that choose to be great instead of big’ and ‘No Man’s Land’ respectively. Small giants, as Doug Tatum explains in “No Man’s Land” are often the most efficient and profitable (in respect to their size) businesses operating today, and are defined as businesses that have focussed on consolidating their core operations and beliefs, servicing a small-to-medium sized constituency of clients and are motivated more by providing exceptional service or products, rather than building the scale of the services provided.
Small Giants value greatness over growth.
After all, business expansion remains extremely risky; countless companies have perished in what Doug Tatum defines as ‘No Man’s Land’, a conceptual understanding of a period of adolescence as a business expands from a small-to-medium sized enterprise and tries to compete with the giants of the industry. Let’s be clear, however, small giants aren’t necessarily opposed to growth, but they are opposed to growth at all costs. Keep in mind that some of your strongest unique selling points, or most attractive value traits - in the eyes of your clients - might ultimately be thrown out the window if you take a ‘growth at all costs’ approach to your expansion, and sacrifice communication with your clients, or a high-quality product or service in the interest of building a bigger, rather than better business. There’s also a million and more variables to consider that could go wrong in this period: perhaps you’re unable to compete on this scale with existing giants, or the quality of your services or products ultimately suffer in the expansion, as your staff spread themselves too thin. Tatum also outlines the importance of maintaining the CEO and/or founder’s ethos, which becomes particularly strained as that inspirational or motivational figure becomes bogged-down in the bureaucratic sides of business expansion.
Common traits of Small Giants are:
• Companies that retain a leader who has a vision for the company, knows what they want out of their business and staff, and more importantly can answer clearly why they expect this.
• Companies that are grass-roots, and remain connected to the community in which they do business.
• Companies that have formed – and maintain – close working and personal ties with both their customers and suppliers.
• Companies with a leader that has retained a strong sense of passion and vision; someone that is not motivated purely by financial gain.
• Companies that operate with a sound, proven business model that protects gross margins.
• Companies that permeate a healthy work culture within the organization, promote caring for their colleagues and their clients, and assure existing staff understand and appreciate the responsibilities of everyone in the team.
Both authors agree that the paradigm of trying to make a billion over a million dollars can be thrown out the window if business isn’t suitable for a massive expansion plan. That business’ best option is to consolidate its operations, maintain their core staff, and look to providing existing customers with an exceptional level of service that assures their return in the future. Small Giants have become such a prevalent phenomenon that last year, Forbes released its Small Giants of 2017: America’s Best Small Companies list, which listed many companies with annual revenues between $2-million up to $50-million that were providing an exceptional level of service. The theory works here in the sense that if these companies were to expand massively, and rapidly, the quality of their services would ultimately be undermined.
Now that we’ve covered the basics of what makes a small giant, what the benefits are operating as a small giant rather than trying to break in to the big time, it’s time to ask you a few final questions. Could you benefit from this approach, rather than the more status-quo belief that big means better? Are you more interested in providing customers with an exceptional level of service, or a high-quality product than trying to hit the big leagues? Are you struggling in the transition while trying to expand? Has this expansion plan impacted the quality of your product or service?
If the answer to any of these questions is yes, it might be time to consider the benefits of operating as a small giant. While it may not fall under the traditional definition of success in business, the benefits of maintaining all the promises you’ve made to clients and fostering working-relationships with suppliers and the local community could ultimately prove the best move in terms of maintaining your profitability. As we mentioned before, expansion plans are risky, can make a company lose its original vision, the quality of the service, and often swallow up businesses whole, so consider the benefits of operating as a small giant before you make the plunge.
As always, we’ll be here every step of the way in your journey toward continual improvement, and we’re ideally-positioned to facilitate your path; either toward expansion, or your consolidation as a small giant.