Robert Craven interviews Bo Burlingham
VIDEO: 56:31 mins
AUTHOR: Robert Craven and Bo Burlingham
Our GYDA Talks special guest for June 2021 needs little introduction…
Bo Burlingham is an editor-at-large of Inc. magazine and the author of five books, the most recent being 'Finish Big: How Great Entrepreneurs Exit Their Companies on Top' (Portfolio/Penguin, 2014). A previous book, 'Small Giants: Companies That Choose To Be Great Instead of Big' (Portfolio/Penguin, 2006), was one of five finalists for the 2006 Financial Times/Goldman Sachs Business Book of the Year award.
Burlingham joined Inc. in January 1983 as a senior editor and became executive editor six months later. As executive editor, he was involved in much of the magazine’s early coverage of innovative companies that have since emerged as leaders of the so-called New Economy. In 1990, he resigned that position so that he could do more writing and assumed the title of editor-at-large. Subsequently he wrote two books with Jack Stack, the co-founder and CEO of SRC Holdings Corp. (formerly, Springfield Remanufacturing Corp.) and the pioneer of open-book management. One of the books, The Great Game of Business (Doubleday/Currency, 1992), introduced the concept of open-book management, has sold more than 300,000 copies, and was named one of “the 100 best business books of all time.” The other, A Stake in the Outcome (Doubleday/Currency, 2002), recounted how SRC built its culture of ownership while developing the business model that has allowed it to grow from $16 million to $600 million in revenue as of this writing.
Burlingham also co-authors with Norm Brodsky the popular column in Inc. called “Street Smarts,” which was the winner of a gold Azbee award from the American Society of Business Publication Editors in 2008, and a finalist for a National Magazine Award in 2006 and 2008. He and Brodsky also wrote The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up (Portfolio/Penguin, 2008). (When the book was reissued in paperback a year later, the title was changed to Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.)
A former Fulbright Scholar and a Woodrow Wilson Fellow, Burlingham graduated from Princeton University in 1967 with a B.A. in public and international affairs. He subsequently served as managing editor of Ramparts magazine, contributing editor of New Times magazine, and a member of the editorial board of Working Papers, and wrote for numerous publications, including Harper’s, Esquire, Mother Jones, The Boston Globe, and Boston magazine.
In the early 1980s, he joined Fidelity Investments, the mutual fund company, where he worked with fund managers and top executives, including Peter Lynch. Burlingham was a founding member, with Tom Peters, of PAC/World, an international organization of business leaders and observers. He served on the board of The Body Shop Inc., the U.S. subsidiary of the international skin and hair care company, from 1992 to 1997.
Bo and his wife, Lisa, have been married for 44 years and live in Oakland, California, and Sancerre, France. They have two children and four grandchildren.
Robert and Bo discuss:
Why Bo wrote Small Giants and Finish Big
Where are the Small Giants now?
Post-Covid – is there a greater call for a Small Giants philosophy?
How does Finish Big sit against the Small Giants philosophy?
Finish Big – what does this mean in practice?
Bo’s top tips and pearls of wisdom
Transcription:
Robert Craven 00:07
Hello, and welcome to the GYDA Talks. And today I am absolutely delighted to have as the someone whose book I keep thrusting into people's hands, a gentleman whose books I buy by the dozen and distribute. The name of that gentleman is Bo Burlingham, who is the author of Small Giants and finished big as the two books I want to talk today. Hello, Bo, great to have you here.
Bo Burlingham 00:31
It's wonderful to be here, Rob.
Robert Craven 00:33
That's brilliant. I mean, I mean, let's just get let's just get straight into the conversation. Can you throw our off for the few people that I know that don't know the Small Giants philosophy and the Small Giants approach? Could you just outline in your words? What what the Small Giants pieces what the Small Giants ology is all about?
Bo Burlingham 00:55
Well, really, it's all summed up in the subtitle of the book, it's called Small Giants, companies that choose to be great instead of big. In other words, these are companies that have made a basic first place that the book challenges everybody to define what it means to build a great company. And you know, different people have different definitions of that. But it's something that everybody should ask themselves, rather than just take for granted that the goal of having a company is to get it as big as possible, as fast as possible. And so I look at, you know, 14 companies that have really made a decision that they want to be great companies. And the question I ask is, "Well, what do they have in common? What what is it? What does being a great company mean to them?" And that's really what the book is about.
Robert Craven 02:06
And it's, I mean, I came across it a long time ago. And it was a huge, a huge aha, because to quote you very badly and misquote you very badly. There's that general idea which I see all the time, which is, you know, the kitchen table, the dining room table, the garage, small industrial unit, large industrial units. And then the man from Kraft Procter and Gamble, whoever it is arrived with a check for 50-100 million. And, and that American dream, and certainly I'm on the other side of the pond, and it feels very much like an American dream. So many people have been sold into it. And yet it happens so rarely. And even if it does happen. Those people don't seem to be very happy when I look at the people who sold out there is only so there are only so many ways you can mow the lawn. There are only there's only so much pleasure as an entrepreneur you can get from taking the kids to school, lots of them don't seem to have it should be gloriously happy. But somehow it doesn't seem to work and and Small Giants just went tick tick tick tick in my brain, as I said, as a wake up call.
Bo Burlingham 03:24
Yes. Well, I think a lot of people have that, although my theory about the popularity of Small Giants, is that I really was just telling people things they knew already. They knew it in their hearts. And, you know, there were a lot of people who read Small Giants and said, "Yes, that's what we're trying to do. And that's the kind of company that we want to be." And as a result, and then a lot of people began telling me that I should create an organisation so that people could relate to each other and be in touch with each other. And one of the people who was urging me to do this was a fellow named Paul Spiegelman, who had a great company, frankly, it would have been in Small Giants, except that I didn't meet him until after I'd written the book. And he was he was sort of telling me that I should really do something with this. And I said, Paul, listen, I agree with you that there's a great opportunity here and that we should take advantage of it. But I'm a journalist, I am not an entrepreneur. I don't think I'd make a very good entrepreneur. And this requires somebody who knows how to build an organisation who knows how to who has enough financial resources to do it, and who has experience in terms of getting it to cashflow positive. If you're going to build something that's gonna last it has to pay for itself. And I said, you know, you've done that, if that's something you think you would like to do, I will support you, I'd be happy to do it with you and endorse what you're doing. And he said, Do it, do it, I really mean that. And I said, Yes, absolutely. And so we decided, and we together, started what is called the Small Giants community, which is mainly an American organisation, although we do have members, really from all over the world. I mean, there's a you know, there were people, certainly in the UK, there are people in, in France and, and Germany, and so forth who identify with this message is nothing about the message that is inherently American. I mean, the message itself can apply to anybody anywhere.
Robert Craven 06:06
But what's interesting is that it, it's in my version of history, so I'm not saying my dates are correct, my version of memory is that the on reading the book, the Big Aha is, you can own this, you don't have to sell it, there are other ways of getting out of running a business. There are other versions of what success looks like, you don't have to believe what the business schools tell you, you don't have to believe what Silicon Valley tells you, it's okay, it's okay to have something that you're proud of, don't have to you don't have to be able to wander around in a Ferrari and have all the millions of dollars. And I think that that that kind of came before the Simon Sinek rush of purpose stuff. And now we have, you know, everyone's talking about the purpose of their businesses, like the most important thing almost that people want to talk about. And yet Small Giants was before that, and it was actually more, I think, in my mind is a more more subtle and more sophisticated argument about taking control of your destiny. And not assuming that you have to you have to run by the standard playbook that everyone.
07:32
Where you have choices, everybody has choices in business, this is all about making choices. And, you know, the question is, Do you know who you are what you want, and why? Because if you don't, you're going to do what other people tell you you should do. And if you know who you are, what you want, and why then you can chart your own course. You know, you're sort of when you talk about selling it. I mean, in Small Giants, I don't really address the exit issues. And the different companies that I wrote about way back in 2005, have followed different routes. So that was really what I got into with finish big, which was ultimately, what are you? What are you going to do because eventually everybody is going to exit their business. I mean, as I told you before, it'll you only not going to exit if you live forever. And we don't have any examples of that yet. Except maybe one the this. So, sooner or later, everybody has to decide what they want to do when what's going to happen when they reach the end of the line when they reached the end of the journey that they're on. And that's in fact, the way that people should look at building a business that is not a construction process. It's a journey. And like every journey, it has a beginning and a middle and an end. And the end is not when you build a company. That's the middle. The end is when you leave that company
Robert Craven 09:39
I don't think many people kind of get that when they're in when they're in the middle of the rush when they're in the middle of our yeah, because it's like I always see businesses being like, like like a child like the stages of child like near the baby. When toddler young adolescent, and we've always got this next stage, which we don't quite understand, which we're trying to deal with, and we deal with it, and then we move on to the next stage. And there's there's such a drive for people to grow their business growth equals success. It's like the Woody Allen joke about a relationship. Should should, should be like a shark should be moving forwards. And what we've got here is a dead shark. And, and all I mean, even, it's even worse now with Facebook and LinkedIn and clubhouse and stuff. It's all grow, grow, grow, be rich, be rich, be happy, be fair, look at me fear of missing out. And I kind of really felt that both Small Giants and finished big in a different way, gave people a way out of not playing that game, which goes back, I guess to what you're saying about who you are and what you want, and why you did it. What became of all the small Johnson, because Tom Peters is always given a bit of a bit of a beating for his his excellence, people not being quite as excellent as he thought they would be, and not them not surviving quite as well, as he predicted they would be I'd be curious what happened to the different Small Giants?
Bo Burlingham 11:27
Well, actually, you know, there are two versions of Small Giants is the original version. And then there's the I think it's the 10 year version, which came out 10 years later. And one of the reasons why there's a 10 year version is because almost as soon as Small Giants was published, I began to realise that I'd miss something. And big it happened, really, because one of the companies that I had written about, and which was, you know, doing great and, and was a very successful company, and everybody seemed very happy and so forth. They got into trouble. And I sort of found out about it, because I, I emailed to one of the is a company rail had rail precision manufacturing, they, they make the laptop hinges, you know, when you have a laptop, and you put up the top, the top, it doesn't fall right down. And that's because of the particular type type of hinge it has, which is called a constant torque hinge. And there was one company that really sort of pioneered the constant torque hinge. And that was rail precision manufacturing. And I, shortly after Small Giants was published, I don't know a few months, probably afterwards. But of course, you know, it takes nine months after I sort of submit my manuscript, it takes nine months before the publication comes out. And then the book came out. And then shortly after that, I was emailing to one of the CEOs of this company, and I got a response that was clearly not from the company that was clearly from a personal address. And I didn't know what was going on. I didn't understand. I didn't know what it happened. So I called up the other CEO. And he said, Oh, yes, it's a big mess. I said, what happened? He said, Well, the founders who were on the board, there were three founders, and they were on the board, they all left, they all retired. And the board decided, looking at the company decided that we needed a new CEO. And so they, they actually promoted, somebody was already working at the company to be CEO. And they, you know, there were a lot of hard feelings, and were a lot of conflict. And one of this see the guy I was talking to had actually moved from being the CEO to being on the board. The other person who was the one I had tried to email. He had left the company and in fact, was suing the company. And I said, just while this doesn't sound very much like a small giant to me, I better I better find out what's going on and what really happened. And I couldn't do it. I was working at Ink Magazine then. And I couldn't. I wanted to do an article about it right away. But I couldn't, because there were all these lawsuits going on, and people wouldn't talk to me. So I had to wait until the lawsuits got resolved. And then I did go out to sort of figure out what had happened. And what I discovered was that the company had gotten into a serious problem. And it really came down to a decision, one decision, one bad decision that they had made. I say it was a bad decision, it was a tough decision. Basically, what happened was, you know, they were making these hinges for laptops, and they were by far the leading manufacturer of them in the world.
Bo Burlingham 16:02
And that was fine when laptops were being made in the United States. And they had a very close relationship to all of the companies they were supplying. But then the manufacturer of laptops moved to Asia. And suddenly, the people who they were dealing with their customers were very far away. And what's more there, they have local suppliers, they had local suppliers, which were easier for them to deal with, and who were dealing with a situation that allowed them to charge an awful lot less than rail charge, and rail faced a decision. And that was do we do we go ahead? And do we compete with these companies on price? Or, you know, do we do we just sort of give up this business, and they decide that they had to sort of keep in the business, because if they didn't, they were going to have to lay off a lot of their workers and one of their key points. One of their sort of bedrock principles was that they weren't going to lay people off. And so they decided to go ahead and under pressure from the, their customers, they had to layoff I mean, they had to keep reducing their prices, so that by the time I went to visit them, which was, you know, probably two years later, they were actually selling more laptop hinges than ever, and they were losing money on every single one of them. And, you know, it was just an unsustainable situation.
Bo Burlingham 18:07
And they were under tremendous pressure to reduce their labour costs, which there was really at that point only one way. I mean, you know, you can, you can reduce labour costs by everybody agreeing temporarily to sort of take a cut and pay, which they did. But it's one thing to do that for five or six months. It's another thing to have that go on for years. Yeah. And the morale in the company got very, very bad. And eventually, there was no, there wasn't much faith in the new CEO that the board had hired. And, you know, it was really the, the, the culture of the company had just really been disintegrated. It would have been a very, very positive culture, when I had first visited them, had completely disintegrated. And that was very shocking to me, to see how quickly a culture which seemed to be very strong, could, frankly, fall apart. And fortunately, that was not the end of the company. Fortunately, the board realised at a certain point, that the guy who they had put in was not the right guy to be running this company. As it happened, he had hired somebody else. To come into the company, who the board thought, well, at least temporarily, this guy looks a lot better. So we're going to have him come in. And his name was Kyle Smith and he was made the CEO. And literally one week later, he got a visit from the bank who said, this situation is disastrous that you have here and we need to get we need to call our loans. And which was going to which would destroy the company. And he said, Well, you know, I can't disagree with you the situation is bad. Let me tell you what i've what I think should be done about it. And he proceeded to lay out his plan. And his plan was basically, to get out of the laptop hinge business, I mean, basically, their most successful product, the product that they own, was killing them. And so they couldn't continue to stay in that business. On the other hand, it's not such a simple matter. To get out of it. I mean, they were depending on the cash flow that they were getting from those laptop hinges to pay everybody salary.
Bo Burlingham 21:06
So this is not something you could do overnight, this was going to take months. Now, evidently, what he told the banker was persuasive enough that the banker was willing to give him time to start implementing this plan. And he did, he did do it it you know, it took about a year to get to the point where they had completely move, given up at move to hat brought up, but focused on new products really sort of fundamentally changed the company. But he was successful in making that happen, and the company did survive, and the company is actually doing very, very well right now. But that made me realise that even though when I had selected the companies that I was going to write about in the Small Giants, I wanted companies that had been in business long enough, at least 15 or 20 years, and had, you know, been profitable during that time. And it's sort of experienced the ups and downs of business. But I realised that that was not adequate, is that that, that, in fact, these companies could fail. And if they weren't careful, and in fact, one of the companies that I had written about a company called Rhythm and hues, Rhythm and hues is was one of the was probably the leading special effects companies in Hollywood. And it was, it was, you know, whenever you saw, you know, babe in the city about the pig. Well, and the pig was talking or, or the Chronicles of Narnia, wherever you saw animals talking within us had something to do with it. And they had been their PSA to raise the SOS turned out to be the Life of Pi. Which, if you saw it, you know that there was a boy on a boat in a in an ocean with a tiger. Well, there wasn't really a boy on a boat in an ocean with a tiger. That was all computer special effects. But it was very effective and the director, I think he won that year for Best Director. I like pie may have won the best film of the year.
Bo Burlingham 23:44
And while the movie was getting its when it got it toward its Academy Award, that was actually 11 days after Rhythm and hues had filed for Chapter 11 bankruptcy. And so I realised, you know, there were there were certain things that a company had to be very careful about, or it would no longer it could do all kinds of wonderful things as a small giant. But if it didn't, if it wasn't careful about certain things, it was going to get in trouble. And so when I when we put out brought out that 10th edition, I said to the publisher, I have to add add a chapter there, because I've learned things since the first edition was published that made it clear to me that I had to say more about exactly how Small Giants can fail. And I said basically three things number one that you have have to have a, you have to have steady gross margins that you protect. That was the problem that rail got into. The second one was that you have to have a business model that you adapt to a changing environment. That's what rhythm and hues got into trouble about it, the business environment in which it was competing, there very successfully had changed. And it had not changed itself. And so that's what led to their bankruptcy. And then the third one was actually another company that hadn't been in the book, but would have been in the book, if I'd known about them at the time. But they also got into trouble, they got into trouble, for the simple reason that they, they didn't understand their balance sheet, and they weren't paying attention to their balance sheet. And as a result, they became way over extended. And they simply were in a situation where they couldn't meet their payments, what they owed to their creditors, and still play their employees.
Robert Craven 26:32
But I think that's that's brutal common sense, if that makes sense. That that one of the one of the things, which I really object to about the whole purpose driven business type, noise that goes on, is they they say, you know, if you're passionate and enthusiastic, everything else will take care of itself.
Bo Burlingham 26:56
Wish it were true.
Robert Craven 26:58
Exactly. And yeah, and you've even everyone, kind of most businesses resist looking at the finances and the numbers. It's the place that clearly, clearly you've, you've, you've got, you've got to look early, and you've got to be on top of agencies and businesses that I see that do well, are on top of the numbers, they they respond quickly, I've got to ask, curiously, talk about the changes in the environment? How are you aware of how well, Small Giants small businesses have a focus to, to COVID, because COVID has pushed so many businesses to at a minimum?
Bo Burlingham 27:43
Well, actually, actually, that that gets to the story of another book that I wrote, called the Great game of business, I wrote that book with Jack stack, and it's about, in fact, setting up a company, so that everybody in the company is involved in running the business, I mean, and when I say running the business, I mean, everybody in the company knows, follows on a weekly basis, what's happening with the income statement, the and the cash flow statement. And everybody knows what, what those are and why they're important, and what's happening with them. And it's the companies that follow this. That's the system that I wrote about, initially, in the great game of business. And then I followed up with Jack with another book called The stake in the outcome. Because basically, the, what, what Jack stacks philosophy was, was that he would anyway, go to everybody in the company and say, Look, forget everything you've heard about business and how complicated it is, and how you need an MBA to understand they said, That's all a bunch of baloney. He said, business is is a game, you know, it's not a science, not an art, it's a game. And like every game, in order to play it, you've got to understand it, you've got to get it. And there are three conditions that have to exist. Number one, you have to know what the rules are. And number two, you have to get enough thought get enough information regularly so that you can follow the action and keep score. And number three, you have to care about whether or not you win or lose, you have to have a stake in the outcome. It's got to matter to you that and and he's basically said, Well, that's business that's that's what business is. And the difference is that in most companies, there are a small number of people at the top of the business who understand that and and everybody else is sort of waiting to be told what to do. He said, I think you're gonna have a much stronger business, if everybody understands that. And everybody sort of gets that information. And it also gets rewarded if they, if they do better than the market. And that's the way that he's he set up his company, which is who was called Springfield remanufacturing corp, it's now called SRC holdings, because it's not just one company, it's 14 different companies. You know, it's gone from being it was a leveraged buyout, probably the worst leveraged buyout in history. They started out with a 89 to one debt to equity ratio, and they, but but they implemented this system, and the company just continued to grow over a long period of time, you know, it's now three quarters of a billion dollars in sales. And I don't think they've had an unprofitable quarter. And in fact, companies that fought use this method were, were really tested. I mean, obviously, every company was tested during the pandemic. What was remarkable, but was at the companies that were following this system, called the great game of business. They did much better than anybody else, they had no layoffs. They, you know, they could talk to their people, and they could, everybody understood what the situation was and what they were facing. And then they could make decisions about what to do. That everybody, everybody was involved in making those decisions, so everybody could get behind them. Now, the Small Giants, there are some of the small giants that were had adopted this system called the great game of business. And they did extremely well, during the, during the pandemic.
Robert Craven 32:31
I was gonna say, Why do you? Why do you think businesses shy away from sharing data? Is it just because the CEO or the MD is embarrassed to admit they're taking home? $200,000 when they're paying everyone else? 30,000? Or what's what's what do you think the reason is.
Bo Burlingham 32:50
Well, people have a lot of sort of stupid reasons for not sharing the numbers, and they have a lot of stupid fears. One is that they think that if they that they're afraid that if they start sharing the numbers in their competitors, they're gonna get that information. And, you know, which is really not the case. If it does happen, it's not a big deal. The other thing is that they, you know, you, you mentioned that people wil imagine that there are find out that they're, in fact, making a lot of money. The opposite is also true that a lot of people feel that if they know what's really going on, they'll leave. Because, and, you know, in fact, the fact is, is that when when they don't share the reality of the business, the people who work in the company, by and large, exaggerate to a tremendous degree, most people do not understand the difference between sales and profits. And, and, and they think that, you know, if you're making a lot of if customers are paying you a lot of money, then all that money is going into the owners pocket, which is of course ridiculous. And so the only alternative is to the rumours and the wild speculation that people have in their ignorance is to teach them what the truth is and what the reality is. That's why people pick there are many reasons there are reasons like that. that people don't do it. There's another reason that people don't do it. And that is, and this is reasonable, which is that it's hard to do takes a lot of work to do this. I mean, if you're going to educate your entire workforce, on the finances of your business, that doesn't happen overnight, that that really takes a lot of work. And some people just don't want it, they, you know, they think, Oh, we don't need to do that. They don't really want to know, what's going on anyway. And to some extent, that's true. And, you know, so it does, I mean, the question is, is the app to look at the companies that have adopted this system? And you have to say, is that the kind of company I want. And if it's not the kind of company you want, and you shouldn't do it, because it's going to be hard.
Robert Craven 36:06
It's gonna, there's also a point, which is, your team can't say you haven't told us even if the team aren't interested, or they're not able to fully comprehend. Because I've always maintained you know, you go to you go to your staff and say, we're going to have to borrow $500,000 Number is just way too big. If you ask them, Oh, can you lend me $20 for the taxi home, they go, Oh, my God, 20, he needed $20. To borrow that that number is, is fine, they get that number. But the numbers you talk about, as soon as you've got 10, or 20 stuff, the numbers are like Mickey Mouse telephone numbers, they mean nothing to people. But there's no harm.
Bo Burlingham 36:52
They mean, they mean nothing, as long as they don't really understand what's going on. Now with SRC, SRC has been in business for I was not quite 40 years yet. And they were they, they, they they were born, they came into being during a recession. And over time, they've become aware of it proximately, every 10 years, they're going to get into another recession. And so after the 2008-2009 recession, they said, Well, we're gonna have another recession in about 10 years. And, you know, recessions are bad, if you're not prepared for them, if you're totally prepared for them, recessions are great, because the cost of everything goes down. And if you have cash, you know, you can do all kinds of things. So they said, We're going to develop a war chest of $100 million over the next 10 years, and believe me, everybody in that company understood what they were doing and why they were doing it. And the result was when the pandemic came around, they had cash coming out of their ears, they, you know, they didn't have to lay anybody off. And they, I mean, clearly, they had to deal with a lot of the, the problems that everybody was dealing with, but they had the resources to be able to continue functioning very, very well. And, you know, that was true of a lot of the great game companies. And, you know, to the extent that the Small Giants companies were following that, that way of running a business, they did very well.
Robert Craven 38:59
And, of course, you know, the reality was that, you know, when the, when the sea level comes down, it's only then that we discover quite who's wearing what and who's not wearing what, and I think so many people had such a great 2019. And, and also, so many young businesses had no experience, you know, it's easy when you got grey hair to say this. So many young businesses had no experience of a recession. And it's like, guys, is it gonna take three years to grind through, you know, guys, slow down, but it will turn around, there will be losers, there will be winners, there'll be people above the line, people beneath the line, and you just need to and our experience was the good businesses, who had been charging decent prices have been making good profits did have deep pockets and they would survive and more importantly, they were good at marketing and business development. It's like, obvious and therefore they survived the recession and the ones who had been running hadn't been great. Were the ones ones who who was suffering. Moving on centre, I'm just aware of time. That's fascinating about about about that I think people are going to rush out and buy that book because they wish they'd read it a year ago. The finished big thing is a really simple formula, which, which is, you read it and you go, why haven't people read this? Why haven't they figured this out? Because simply because as I said earlier on, you see, so many people who have really unpleasant experiences of, of selling their business have really eaten when they do that, then they're not prepared. And this is kind of ironic, because everything builds them up to the sale as the end point.
Bo Burlingham 40:56
Yeah, the, you know, the book is called finished big. But if, as you know, having read the book, it's really about finishing happy. The goal of this is to wind up happy, and after you've left the business, and what's going to make you happy is going to be different for different people, people get led astray, when they think it's all about the amount of money that they get. And then when they do that, then they get to the point where they've got all this money in their bank account, but they're not prepared. You know, there are a lot of things that people get out of a business that they're not aware of, until they don't have it anymore. For one thing, it's their identity. You know, people ask them what they do. And they, they say what they do, it's their, it's their purpose. It's why they, why they why they're going on why they're living. It's their, it's their, the group of people who they see every day, and who are the people who they interact with. You know, it says sense of progress. Business gives you a sense of progress, that, you know, you can look and you say, well, you can go went from here to here. It's, it's also the structure of your life, the business tells you what you need to do. If you get into a situation, well, everybody does when they leave their business, they get into a situation where they don't have any of those things. You know, the people told me that what they hated most was, you know, going to a party or something like that. And they'd run into somebody, and they'd have a nice conversation, the person would say, Well, what do you do? And they wouldn't know what to what to what to answer. They say, Well, I used to have this business. Oh, that's great. What do you do now. And you know, they wouldn't know what to say. You know, they, these if the result is that for many people, particularly if you spend a long time building your business, when you leave it, you feel lost, or you may feel lost. Now, I will say this is that I looked for companies, you know, that had really something very special going for them, that they had managed to hold on to, through different changes of ownership. And I could only find two types of businesses that really sort of maintain whatever it is that was special about those businesses, through two changes through at least two changes of ownership. And those were either family businesses, or they were employee owned businesses. And my theory was that in both cases, you had people who are willing to protect whatever was the essence of that business. And and I think that, you know, I do think that, you know, if your goal is to build a business is going to last, after you, which is one of the first questions you should ask yourself, you should ask yourself, when you're starting the business, is that what I'm building here? am I building a business that I want to have go on after me will even after I leave it? Well, that's a fundamental thing that you have to prepare for and you have to be prepared for very early and you have to be prepared. airing it for it all the time that you're building your business. You know, and again, it comes back to what I said before about Small Giants, the importance of knowing who you are what you want, and why. Because the fact is, if you haven't figured that out, by the time you sell your business or you leave your business, you're going to run smack into it at that point, because you're going to feel lost. And you're going to be you're going to have to ask yourself, well, wait a minute, what do I want? And and why do I want that? And, you know.
Robert Craven 45:38
I'll give you a really, really quick example, my mother's my mother lives in a care home. And the care home owner phones be really upset. So it's Friday today. I have to tell you that I've sold the care home and it's okay, fine. Well, okay, so what's happening? Who's taking over? Are these new people are taking over and they're taking over? Tomorrow morning, Saturday morning, we've just signed a contract, I wanted you to know why. Right. So what does that mean for you, as you said, I don't know. I spent 35 years looking after the residents looking after my staff, this, this is my family. This is my life. This is my identity. I don't know what to do tomorrow morning. So I said, Well, what do you mean, you don't know what to do tomorrow morning? She said, Yeah, aside from opening a bottle of champagne, and having that in bed. I have no idea what to do after that. And I'm really frightened. And it's in the book. It's blindingly obvious, you know, when you step back from it. But we put 30-40 years of our identity into Iran as I am I do. And then just to go off the edge and not have something to replace it something to move forward to is is, I think, scary for lots of us. And those that get it right, you can see see how happier they are as they move on to, to put that energy into different things and explore different ways of going forward. Yeah.
Bo Burlingham 47:11
One of the things that I mean, the fact that there are a lot of people who are very unhappy after they sell their businesses was what I discovered very early, I got a contract to write this book. And I wasn't sure what I was going to write about, I just knew that there was a great interest in what the experience was like. And so I said, well, first I've got to go out and I've got to interview people who've been through it. And the shocking thing was, what a high percentage of them were unhappy. And I said, Okay, well, that's what the book has to be about, has to be a book about what's the difference between the ones who are happy, and the ones who are unhappy. And so I had to define at the begin by defining Well, what is a good exit. And I, you know, there were five criteria for it. Number one, you know, you had to have the sense that what you've gone through has been a positive experience and that you've received a fair reward for the effort that you've put into it. You know, number two, you have to be able to you know, you want to be able to look back on what you've done and know that you've made a contribution and that you can take some pride in that. Number three, you the other people who've been on the journey with you are all have been taken care of. And number four, that you know that you found something else to do that you can invest your energy and and all of the energy that you've been putting into your business, you found something else that you can put it into and for some people there's a fifth one which is that the company is going on and doing better than ever. But to me those are the criteria required for a good exit. And if you and you know if you if you if you don't have if you don't have any one of those you can wind up miserable afterwards
Robert Craven 49:49
or the flow love that I mean I think it's it's it's a kind of must read I think both of them are must reads in in different in different ways. I think the I think that that small Will John's really challenges people's assumptions about what they thought being in business was about. And I think that finish big, really, again, challenges assumptions, but about. So few people actually get to exit. And more importantly, those that do so few of them are happy. It's like, all these people imagining they're going to play football for the national team, and so on and so forth. Very few actually get there. And also, it's about your travel. Yes, my mother says she twice in this interview she has mentioned, you're better to travel in hope that arrive in vain. And I think that, that there's a there's a, we need to get our education of entrepreneurs and business owners kind of shifted to, to reality rather than the kind of the dreams which we've been sold, which I think aren't correct, which, which is why I love I love your work. We're about to run out of time, though, which is a real, real shame, because I could talk for hours too. But could you share with us some of some of your, what you feel like top tips or, or, or golden nuggets are that you'd share with people who are running their businesses running their own businesses growing their businesses, because you've, you've interviewed so many, you've seen the good, the bad, ugly, be really interested to know what some of your kind of?
Bo Burlingham 51:30
Well, I would, I would come back to what I said before, about the importance of knowing who you are, what you want, and why. And that's not something you figure out in a weekend. It's not it's not something you say, Okay, I'm gonna take, I'm gonna take a week and figure out who I am. Most of us spend our entire lives trying to I mean, I'm still figuring it out. And I'm, I'm about 75 years old, and I, and I'm still figuring it out. And a lot of times it's during, it's when you are in a difficult situation, that you find out exactly what is most important to you, and what you want to do. So I would say that, you know, realising that, and realising the importance of figuring that out, is absolutely crucial. Because it allows you if you know what you want, and why it allows you to make better decisions. To many people, it is very easy to just go along with what other people are saying is the is, you know, you're in business lawyer. And by the way, you're trying to grow your business, you want your business to get as big as possible. Well, maybe you do, maybe you don't. You want to sell your business for as much money as well, maybe you do, maybe you don't. The important thing is to really understand what it is, that's going to make you happy. And, you know, ultimately, I think that's what we're all looking for in our lives is we want to be in a situation where we can be happy.
Robert Craven 53:25
That's an awesome place to stop. That's both, I cannot recommend the books enough. There's three books that people need to be buying. We'll put the links down afterwards. And we'll also put links afterwards in how you can get ahold of how you can find out more about his books and what he's doing. Thank you so much for sharing so much. It's been it's been fast and furious. And we've covered a lot but actually we're, we've talked about I mean it's really philosophical and quite challenging for people.
Bo Burlingham 54:06
Yeah, I could I just add one thing if you're interested in after reading Small Giants in being connected to other people, you should probably people should probably check out small giants.org Because that is the website of the Small Giants community. And frankly, they do some you know, I'm basically a cheerleader I sort of stand there and say Oh, it's great what you're doing but but these are this is being done by other people who've really just done some tremendous stuff and and it's a great resource. If if you if you are if you if you do read Small Giants and thank you GE that's, that's what I want to do. It's a great resource for you.
Robert Craven 55:04
I absolutely agree with that. I think you cannot fail to read Small Giants and, and for it to shift your perspective of what you've been doing both. Sorry. We've run out of time. It's been an absolute pleasure to talk to you an absolute pleasure to hear your thoughts and hear you talking about these great books. By Berlin, thank you very much for being a really wonderful guest. Thank you very much indeed.
Bo Burlingham 55:30
Thank you, Rob. The pleasure is all mine. Thank you very much.