Recently I’ve come to appreciate how important names and labels can be. It’s much easier to ignore a phenomenon if it has no name. I suspect that’s one reason why the Small Giants phenomenon — that is, companies choosing to be great instead of big — has been ignored up to now: It hasn’t had a name.
These thoughts come to mind as a result of a meeting the staff of Inc. had last Friday with Timothy Faley and Mary Nickson of the Zell Institute for Entrepreneurial Studies, which is affiliated with the Ross School of Business at the University of Michigan in Ann Arbor. We naturally began discussing the different types entrepreneurial companies. Dr. Faley explained that the institute was formed to leverage the University’s enormous research base and thus focused on the fast-growing, venture-backed companies. He and Ms. Nickson noted that there were programs at community colleges to support people who wanted to start restaurants, salons, clothing stores, and the like. What about other types of entrepreneurial businesses? we asked. They said that they also saw people who wanted to have lifestyle businesses.
That is, in fact, the way most people have divided up the world of private companies during the past 25 years. We’ve had the fast-growing, venture-backed gazelles; the stereotypical small businesses; the lifestyle businesses — and that has been about it. In retrospect, it’s clear to me that, in the process, we overlooked a large and important class of entrepreneurial companies, namely, those that aspire to be the best at what they do but that aren’t interested in getting as big as possible. They don’t force growth. They let it come to them. What drives them is the desire to contribute something great to the world. They regard financial success not as the goal, but as a byproduct of having great products and services, of cultivating great relationships with their customers and suppliers, providing a great place for people to work, and being a great corporate citizen. They are, in other words, the Small Giants.
My fondest hope is that, by giving the phenomenon a name, we will help to make visible a part of the economy that has remained invisible for far too long. I also hope we will provide people just starting out in business with a new goal worth striving for.