In a business culture in which fraud, multinational mergers and incidences of sizeable layoffs make headlines, it is refreshing to be reminded that small and midsized businesses – which still drive America’s economy – make both social and economic impacts every day. Especially inspiring are the ways in which these businesses make their mark. Echoing the values that Winning Workplaces advocates, including fostering trust and fairness, open communication policies and work/life balance, small and midsized businesses are becoming increasingly creative in how they treat their employees, go above and beyond in providing great customer service and focus toward a bottom line in which numbers are only part of the equation.
In his book Small Giants, published last year, Inc. magazine Editor-at-Large Bo Burlingham profiles 14 companies that “choose to be great instead of big.” While relatively small and privately held, the organizations Burlingham chronicles could not be more different in their industries, organization, operating principles and people practices. The one true constant among them is what he calls mojo: “something indefinable and immeasurable, something that goes beyond the standard definitions of success in business, something that can easily be lost unless it’s protected against the homogenizing influences brought to bear on every company.”
San Francisco’s Anchor Brewing Company, owned by Fritz Maytag, is a company with mojo, Burlingham states. In 1992, more than 20 years after assuming ownership of the microbrewery, Maytag was faced with the decision to go public. On the one hand, doing so would ensure that supply of the company’s beer selections would keep up with demand. On the other hand, Maytag feared the move would result in strangers becoming the primary shareholders. He turned to his employees, who “weren’t sure they wanted the company to get much bigger. They loved it as it was.” Maytag agreed with them and kept the company privatized. It turned out to be the right move for a business with strong ties to its local client base and the city’s history dating back to the Gold Rush of the mid-1800s. It was the right move for Maytag and his employees as well: they could continue to take pride in the quality of their product by keeping the microbrewery small.
Some of the other companies that Burlingham examines are small giants because their management teams realize they would be nowhere if not for their dedicated employees. Norm Brodsky, owner and CEO of Brooklyn, New York-based CitiStorage, a records-storage business, brought in grief counselors after the 9/11 attacks and sponsored a companywide basketball tournament to raise employees’ spirits. The result is a business in which employees reach out to clients so well that some clients have placed orders intending to raise the workers’ “box counts” (the number of stored boxes) to the next level, at which point Brodsky pays out bonuses.
All of the companies Burlingham profiles work hard to both define their internal community and strengthen their ties to the external community, typically on a local scale with a strong emphasis on personal relationships. The author argues that a sense of community hinges on maintaining three pillars: integrity, professionalism, and human connection. “Indeed, the relationship between the employees and the company is the entire basis for the mojo they exude. You can’t have the second without the first,” Burlingham writes. “Everything … that makes a company extraordinary … depends on those who do the work of the business, day in and day out.”
In another recently published book, Alpha Dogs: How Your Small Business Can Become Leader of the Pack, Donna Fenn, who also writes for Inc.magazine, outlines the strategies for success that eight small businesses have used to come from behind to outperform the competition. In explaining one of the steps, “convert your employees into true believers,” Fenn profiles Dayton, Ohio-based upscale grocer Dorothy Lane Market. She notes the unusual practice the company’s CEO, Norman Mayne, has undertaken for the past 20 years, based on a suggestion from a 16-year-old cashier: talk to each new hire about Dorothy Lane’s company culture, customer retention and competition. Fenn notes that although this training program costs the organization $25,000 annually, it results in a part-time employee turnover rate of 20 to 30 percent – far below the industry average of 100 percent.
Other initiatives Dorothy Lane practices to inform and unite its 250 full-time employees, according to Fenn, include using open-book management, being honest with employees during a recent reduction of the company’s health care coverage and flying kitchen staff to the countries that inspire the grocer’s prepared entrees so they can study firsthand the cooking techniques involved. “For Mayne, one of the key measures of success is the extent to which his employees feel like cogs in the wheel,” Fenn notes. “He wants them to treat his business as if it were their own….”
A telling aside: Two of the leaders whose businesses were profiled in these books – Gary Erickson, CEO of Clif Bar, Inc. (Small Giants), and Patricia Karter, President of Dancing Deer Baking Co. (Alpha Dogs) – are previous Winning Workplaces/FORTUNE Small Business Best Bosses Award winners. As Fenn notes about Dancing Deer, Karter and her staff “went to great lengths to distinguish their company in an industry that’s notorious for poor working conditions and high turnover.” As a result, word spread in the company’s inner-city neighborhood that it is a good place to work. This has translated into a constant pool of eager applicants – some of whom ultimately become satisfied employees.
These great stories offer compelling evidence that small and midsized organizations can make a difference in their industries and in their communities by creating unique and personalized workplaces. They demonstrate that a business can be “successful” without compromising quality or responding to demands of “grow or die.” Finally, they show that building strong ties with customers and inviting employees to contribute to solving core business problems is good business.