Home » Archive » Grow your business: better, not bigger

, written by Jeremy. Read the commentary.

innovation, perfect for purpose, tribal business, small business

Easy to be fat

I get fat.

Mom used to say I was husky. But she was being nice. I could be a tub in weeks if I wasn’t careful.

I’m not fat now but easily could be. It’s hard to find time for exercise. There are too many things that demand attention. My kids, wife, home, and business generate a bewildering flurry of time absorbing tasks. Staying fit always falls down the ladder.

Over the last few weeks I’ve realized that this, right now, is the part of life where men get fat. The demands of life hit an inflection point and it takes everything I’ve got to just keep up. Three years from now I’ll be a balloon if I don’t find some way to crack this riddle.

I think the way through is to be very disciplined about what I eat. I don’t have time to burn anything extra. An ultra-healthy diet and regimented but minimal exercise program seem to be my only option. Eat less, eat better.

Small is beautiful

E. F. Schumacher wrote Small is Beautiful in 1973. It’s one of the fundamental books in ecological economics. It was named one of the most influential books since WWII by London Times.

Schumacher stresses the importance of self-reliance and promotes the virtues of working with nature rather than against it. His interest in Buddhism gave his economics a distinctively ecological character:

“[A modern economist] is used to measuring the ‘standard of living’ by the amount of annual consumption, assuming all the time that a man who consumes more is ‘better off’ that a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption. . . . The less toil there is, the more time and strength is left for artistic creativity. Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity.”

Our seemingly pathological affinity for growth has led to a remarkable paradox. Most CEOs fight to grow ever fatter companies while valiantly fighting to have ever fitter bodies.

Aversion to small business

Small business faces an irrational pressure to grow. Both internal and external forces encourage this – regardless of capacity, strength, or market need. While every firm should grow better, not all businesses should get fatter.

Our company faces this pressure all the time. Countless clients have suggested adding staff – especially when we say no to new work while citing lack of bandwidth. Well-meaning mentors argue for more capacity, broader technologies, and wider scope. Every curious enquiry is centered on “how big?” and never on “how brilliant?”.

While I’ve always wanted to build a brilliant company, I’ve never wanted to make a big one. I don’t think I’d be good at it. It wouldn’t use the best of me. And, to me, that feels like it outweighs everyone else’s obsessive-compulsive fascination with growth.

Grow better, not bigger

“A good soup attracts chairs.” – Akan proverb.

In part this post was inspired by Dave Pollard’s note on Charles Handy. In his book Age of Paradox, Handy interviews the owner of a top-rated winery in California. He writes: “After one sun-drenched day in the wine country of California I asked the owner of the winery about the future. He was passionate about their winery, he said; they were putting back every cent they could into its growth. ‘Where can you grow?’ I asked, looking around at the valley where every inch of land was now fully planted with other people’s vines. ‘Oh, we don’t want to expand,’ he said, ‘we want to grow better, not bigger’.”

Better, not bigger. A nice idea for the environmentally conscious. But it’s a good idea for the highly disciplined businesses too.

In Small Giants, Po Burlingham tells the stories of 14 (at the time) successful companies that deliberately chose to stay small. Being small allowed the business owners, shareholders and employees to have more than they could get by getting big. It’s a worthwhile read mostly for its juxtaposition to what we usually hear about business.

The book is aligned with a sidebar fascination of mine: deliberately tiny companies.

I’ve always liked small things. I loved ants when I was little. I like small computers. I get a big kick out of small details. Why not small, highly tailored companies?

Big in small ways

Several years ago, Tom Peter’s wrote a post on how to eat up the business of big players. At the time I summarized it to three points:

1. Be huge in a small place

2. Be excellent in a big way

3. Look outside for innovation and inside for delivery

Reading these points again, almost four years later, I still think this is a hugely compelling approach to small business. Or big business too – though most at that level will struggle to achieve the nuance needed to succeed in small spaces.

To compete in small spaces, companies need to “know the product, the customer and the competition” (Barnaby Feder, September 21 2004, New York Times). Small giants sell to specialized customers, stay on the edge of technologies, and maintain networks that are difficult to replicate.

Perfect for purpose

I’ve often thought it would be fun to build a big, small home. Big in that it comfortably embraces every purpose with lavish grace. Small in that it does nothing more. Right now my house is bigger than it needs to be because it doesn’t do a good job of doing the few things I need. To make up for gaps takes more room.

In our current place storage is badly arranged. As a result, organization is difficult. Because of this, everything is inefficient and burgeoning.

Our rooms are built in weird ways. One room has a door outside. Another has the furnace room attached. A third includes access to cold storage. The oddities force use into awkward furniture. Some rooms are tightly packed. Others are awash in space.

Poorly built companies can be this way too. Doing too many things poorly makes big make sense. Bigness absorbs bad design.

Tribal business

In 2005 I was trotting back and forth between Ottawa and Paris. My time in Paris bred a fascination with tiny, boutique companies. After some time fiddling with the idea, I started to call these ‘tribal businesses‘.

I’m well aware of the vanity associated with made-up labels. And, while I’ve never been accused of lacking a proclivity for arrogance – I’m not trying to invent something. It’s an idea built out of Jared Diamond’s now ageing book, Guns, Germs and Steel.

Diamond’s book follows the long path of humanity’s transition from tribes to chiefdoms, chiefdoms to kingdoms, kingdoms to agrarian societies, and agrarian societies to now – or where we were just before where we are now – now is likely to be a very different place from a few months ago. For each transition Diamond compares the costs and benefits. The biggest cost has been inefficiency. The biggest benefit has been more people and an increasing opportunity for specialization.

An issue Diamond addresses, but never really connects to the path of growth, is the consequence of inefficiency. He talks of resource exhaustion and raging epidemics but never connects it to the few that found their way through. Societies die; Diamond moves on.

But trailing behind the heedless plunge to bigger and fatter are the few that choose to stay small. Instead of growing some choose to get better, not bigger. They stay tribes. They forsake kingdoms.

A tribe for the times

Are the economic woes of today a consequence of our unfettered pursuit of bigness? Answering this is no simple math.

It is true that despite the obvious inefficiencies and undeniable waste – we still push for big even while seeking paths toward sustainable business.

I wonder, is tribal business part of the answer to today’s wicked problems?

Commentary

Jeremy, this is a wonderful line of thought and something occurs to me out of it. The contradiction between the personal and corporate philosophies of how not to get fat.

Your personal solution to avoiding the bulge is similar to mine. Eat less, eat better, certainly falls in to line with the corporate idea of being small in a brilliant way, but the part that gives me pause for reflection is, how I am treating the rest of my life.

If I do not have time to exercise properly, are the other areas of my life suffering in the same way? Am I only mediocre in the other areas too? Have I given way to increasing my schedule for the sake of having more in it?

The corporate trail, as I read it, calls for decisions regarding what is added, expanded, or improved. Right now, I am asking myself if my family is better served if I made the commitment to be brilliant in a smaller volume instead of delivering mass mediocrity.

PJ, you are right. Absolutely.

There are two ways to respond.

First, to extend to corporate metaphor. If imbalance exists, tending to fatness, chances are good that imbalance exists elsewhere. Worth a look, certainly.

Second, in my own life there is a lot of imbalance. Which, I don’t think, is always a bad thing. But when it hurts my family or keeps me from being a brilliant father and husband, it must be fixed.

In general though I think balance is over-rated. It might seem bizarre, and I might regret these ideas when I’m older but, for today, I think “balance” creates mediocrity.

If I am brilliant in “area x” and you are brilliant in “area y” and both of us are as balanced as possible, neither of us will maximize our strengths. But if I choose to be all-in on “x” and you go hard after “y” and together we agree to balance each other while being deliberately un-balanced ourselves – we will be better overall.

It’s a dependence thing, more than a balance thing. What do you think?

I could not agree more. It seems that the crux of the matter is intention. If we are intentionally living in our brilliance, consciously making the most of what we are given, life is amazing. Not just for us, but everyone we touch.

In retrospect, that is what I was trying to get at with the comment about mass mediocrity. Focusing on balance is a sure fire way to keep from being bad at anything. It will also guarantee that you are not great at anything.

So long as we are aware that deficiency in one area may be indicative of problems in other areas, we can live in perfect imbalance, also known as harmony.

[…] Old technologies – survivor technologies – are important because they already exist, work, and add value. Old technologies are usually open for use to anyone. Old technologies still in production are produced for the sole reason that they are effective and create value. They satisfy the back-side of innovation as much as the front. They are big in small ways. […]