About the Host
Ryan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of selling a business, he joined up with his friend Brandon Wood to educate others on the process. Through their business (Solidity Financial), they provide a platform for entrepreneurs called The Value Advantage™ that helps in exit planning, value building and financial management.
About the Guest
Bo Burlingham is an absolute hero. He was Editor at Large at INC. Magazine for years, Author of some of the business book classics like The Great Game of Business, Small Giants, Street Smarts and the Finish Big. His insights in Finish Big on how the greatest entrepreneurs exit on top lead me to create this podcast and build our firm. If it wasn’t for Bo, Solidity Financial wouldn’t be what it is today.
If you listen, you will learn:
- How the greatest entrepreneurs exit their companies on top
- What the REAL journey of being an entrepreneur looks like
- How to finish big AND be a small giant
- Why 70% of entrepreneurs are unhappy after they sell their companies
Full Transcript
Ryan Tansom:Welcome to Life After Business the podcast where I bring you all the information you need to exit your company and explore what life can be like on the other side. This is Ryan Tansom, your host, and I hope you enjoy this episode.
[00:00:30]
[00:01:00]How is everybody doing today, welcome back to the Life After Business podcast. This is Ryan Tansom, your host. Today's episode is probably my favorite one so far. I've got to interview Bo Burlingham, who you've probably heard me talk about in some of my earlier episodes if you've been following along. Absolutely honored to have him on the show. He is an author of Finish Big, which is one of my favorite books and pretty much started the entire journey that I'm on right now; Street Smarts, which is probably the best overall business book I've ever read; Small Giants, another great one. Then he has two other ones with Jack Stack. One is The Great Game of Business and the one is A Stake in the Outcome.
[00:01:30]This interview with Bo we touch on a lot of different stuff. It's a little bit longer than the other ones but I absolutely loved it. We really get into some really meaty topics about two-thirds of the way, so hang tight in there. I hope you love this interview as much as I do.
This episode of Life After Business is sponsored by The Value Advantage. The Value Advantage is a platform delivered via peer groups and/or one-on-one to help you build a valuable company that can thrive without you, while putting an exit plan in place so you have the options to sell when you want to who you want for how much you want. You're able to manage the business by the numbers, working the business as much or as little as you want, and you fully understand how the business impacts your personal financials. If you want to know more, check out the show notes or the website.
Without further ado, here's my interview with Bo.
Why don't you give our listeners a little bit of an excerpt of why you decided to write Finish Big, because that was one of the biggest things that intrigued me when you had said, you know, how you came to the conclusion that it was worth filling a void, your voice was out to be heard because there was a void in the market.
[00:02:00]
Bo Burlingham:
[00:02:30]
[00:03:00]
I think I explained this in the introduction. You know, I'd been at Inc for many years but when I started working on it I think it was something like twenty-five years. Inc never really looked at exits; never talked about it, never wrote about it. In that I think that the magazine sort of reflected it's readership because if there's one thing most entrepreneurs don't like to think about and talk about it's the end of the journey, it's the exits. That changed when Norm Brodsky, who I do the column with at Inc, came back from a conference and told me that he had met somebody, private equity firm, that wanted to buy his company and that he'd named a couple of conditions, which he thought might be deal breakers and yet they didn't have a problem with them at all. I said to him, maybe we should start writing about this in the magazine and he said, "Sure, why not?" Now, of course in retrospect there were many reasons why not to do it.
[00:03:30]
Ryan Tansom:
I was just going to say that. The fact that he just like jumped on board with that is kind of unique.
Bo Burlingham: Yeah. It is very unique. I have to say that the prospective buyers weren't all that thrilled with the-
Ryan Tansom:No kidding.
Bo Burlingham:
[00:04:00]
[00:04:30]
[00:05:00]The decision. We started doing this weekly series in Inc called The Offer … Not weekly, monthly series called The Offer in which we wrote about exactly what was happening and as close to real time as you can get in a monthly magazine. We went through his whole perspective on it and what his emotions were, you know, his very mixed emotions about the possibility of selling this business that he'd spent most of his adult life building, and wondering what it was going to be like afterwards, and all that. At one point we had asked our readers if they could give him advice about what he should so and we were just flooded with emails, almost all of them saying, "Go for it, Norm." In fact, he did finally decide, yes, okay, he was going to go through with the deal. That was a big deal for the magazine and, in fact, the editor of the magazine decided it was such a big deal that she would put Norm on the cover with a cover line saying, "Norm decides to sell."
Ryan Tansom:Geez.
Bo Burlingham:
[00:05:30]
[00:06:00]That was the issue that was coming out and then we still had to do one … Given the production cycles of magazines you have to do things sort of in advance, so in any event right after that came out, a couple of weeks later I called him up and said, "Okay, what are we going to do for the next column?" He told me, "Well, actually, I decided not to sell." I said, "Norm, we just put out on the front cover of a national magazine that you decided to sell." He was, I think, as shocked as anybody. I was certainly shocked but he was shocked that he'd actually made this decision and I asked him what happened.
[00:06:30]
[00:07:00]He said there'd be some key information that he hadn't been privy to until the very end, namely who was the key decision maker among the buyers and it turned out to be the person who he trusted least, and there had been all kinds of commitments that had been made as to how his employees would be treated, various other things as well. He realized that he could no longer trust them to live up to their promises. Given that situation, given that he didn't trust them anymore, he didn't want to go forward with the deal. We wanted to-
Ryan Tansom:Which is amazing, by the way.
Bo Burlingham: What?
Ryan Tansom:Sorry to interrupt. I want to put a little emphasis on this because, you know, one of the times we tried to sell our business in the [inaudible 00:07:15] time and a lot of people say once the sale train is kind of going they just pretty much just blindly go with it, so for him to be on the cover of an Inc Magazine and …
Bo Burlingham: Right.
[00:07:30]
Ryan Tansom:
Pull back is absolutely crazy.
Bo Burlingham: Yeah. It was amazing. I think he was actually shocked as well when I talked to him about it. I said, "You know, I can't believe you did this." He would say to me, "Well, I can't believe I did it either."
Ryan Tansom:
[00:08:00]But that's crazy courage because that just proves to everybody out there that you're not on the cover of Inc Magazine. You still can say no.
Bo Burlingham:
[00:08:30]Yeah. Right. Anyway, we wound up not … From that point on he did wind up selling a majority stake in his business and there was a whole process that happened after that but we didn't write about it in the magazine because I think by that point he realized that there was a downside to writing it in the magazine. We didn't write about it, actually, until after it had happened but basically the response that we'd gotten from readers while we were doing it made me realize that there was this sort of hunger out there and curiosity among people about, "Well, what is this experience like?"
[00:09:00]
[00:09:30]I did some research online to look and see what was out there and the fact is, is that there's little, if anything, out there that's actually about the experience of going through the exit. There's a lot of things out there about, you know, how to make sure you get the most money and so forth and I'm sure that a lot of that is actually very good, and important, and helpful to people but there's almost nothing about the experience. I talked to my publisher about it and he thought it was actually a good thing to write about. We developed an understanding that I was going to go forward with it and so there I am and one of the first things I realized is other than what I knew about Norm's experience I really didn't know anything about this.
Ryan Tansom:Interesting.
Bo Burlingham: It wasn't something that I'd be aware of before Norm and I had done this series of columns.
Ryan Tansom:
[00:10:00]What was the thing that … Was there a specific story, or experience, or interaction you had with someone that kind of realized how much you didn't know about it?
Bo Burlingham:
[00:10:30]No, I figured that out pretty quickly on my own. I realized the first thing I have to do is I have to educate myself. I began asking people for stories, if the could introduce me to people who had stories. I had a friend who ran a Vistage chapter here in the Bay Area. I asked him if he would mind sort of putting out the word to Vistage chairs around the country. He said he was very happy to do that and I began hearing from companies and from Vistage chairs about companies that I ought to look into because they had good stories and so I followed up. I did somewhere between a hundred and a hundred fifty interviews and-
[00:11:00]
Ryan Tansom:
What was your favorite one?
Bo Burlingham:
[00:11:30]That's hard to say. Every single one of them was unique. Every single story was unique and there were happy ones and there were not happy ones. I'd have a hard time citing a favorite one. There was one that I did which is actually the opening chapter of the book and that one I actually did in person. I did a little bit online with Ray, but in any event I decided that I really wanted to go see them and see in person what was going on.
Ryan Tansom:Was he the one with the security system?
Bo Burlingham: His company, yeah, had the security system through the cameras.
Ryan Tansom:Yes. Yeah, yeah.
[00:12:00]
Bo Burlingham:
When I went to see him he had sold the company and he was on his boat which was sort of his reward that he'd given himself.
Ryan Tansom:Nice.
Bo Burlingham: For having done this. It's a beautiful boat, by the way.
Ryan Tansom:I bet.
Bo Burlingham:
[00:12:30]
[00:13:00]He was actually sort of sheepish when he sort of showed me around the boat, like he was a little embarrassed at how nice it was. In any event, I went to see him and, you know, the thing that really struck me in his story was that it had actually turned out so well for him. He'd originally gotten an offer and he'd gone to, actually, his Vistage chair and the Vistage chair had said, "Well, you know, you can probably get a much better offer if you take some time and make some changes in your business."
[00:13:30]
[00:14:00]He decided to take that advice and he did make some significant changes in his business and how he ran his business because up to then he was sort of the typical entrepreneur, the benevolent dictator, and he really sort of had to change things to get more people involved and to really try and implement some best practices. It was hard, it was hard because part of that involved letting people voice what everything that they sort of felt and every way that they'd felt he was falling short. He had to sort of sit there, and listen to it, and try to understand it, and figure out what to do about it, so that took a lot of courage on his part.
Ryan Tansom:I think you kind of specified this in your book a little bit, but do you think it takes an LOI, or a random offer, or something to awaken the owner to have or accept this feedback or kind of change their direction?
[00:14:30]
Bo Burlingham:
[00:15:00]
For some people, yes. It depends a lot on the individual but Ray was somebody who had been going on, he was getting along in years, and he had reached an age where it had dawned on him that he was not, in fact, going to live forever. He also had a son with some serious disabilities and he wanted to spend more time with him. He was thinking about the things that he wanted to do with the rest of his life. When this offer came along it was like, "Well, you know, I really ought to pay attention to this." I mean, if he'd had that offer twenty years earlier, fifteen years earlier, he might not have paid attention to it.
[00:15:30]
Ryan Tansom:
That's a good point. Yup. Kind of more the timing and the life cycle of the person, and the business, and a lot of other combinations combined?
Bo Burlingham:
[00:16:00]Yes. Exactly. The thing, also, that struck me was … One of the changes that he'd made was to set up sort of a phantom equity system in his company so that the employees would all benefit from whatever sale happened. Now his employees didn't know what to make of this. Most of them, you know, just … I talked to some of them and they all said that it was just sort of a little weird because this was in contrast to the way that he had run the company up until then but, in fact, he did change whole management style and people saw that.
[00:16:30]
[00:17:00]People's responsibilities changed and there were other things that happened that were fortuitous in terms of improving the value of the company. In any event, he worked on this for four years before he felt he was really ready to sell. In the end he got a significant multiple of what the original offer had been. I think it was four times what the original offer had been.
Ryan Tansom:Holy buckets. Four years and four times. I'd say that's a pretty good return.
Bo Burlingham:
[00:17:30]It was pretty good and partly it had to do with what he had done in the company and partly it had to do with his timing because things had changed in the wider world and it happened to be … He happened to wind up selling at a point where the market was very good for a company like his.
Ryan Tansom:Which you can never always foresee. That's more luck of the draw than anything, right?
Bo Burlingham: Yeah.
Ryan Tansom:
[00:18:00]One of the things I wanted to ask you about because a lot of advisors, or professionals, or other business people, or owners when they're on the golf course, everybody focuses on the multiple or how much they got, et cetera, right? One of the biggest things that my dad and I related to and, like you said, I saw myself in your book, was that it isn't all about the money and there is a lot of other things that the owners have do to quote unquote finish big. Can you kind of give us a little bit of a rundown … Our listeners-
Bo Burlingham:
[00:18:30]That was one of the things about Ray Pagano because when I sat down to write, and by then I had done lots and lots of interviews, I wanted to open with somebody who'd actually had a good exit.
Ryan Tansom:Got it. Got it.
Bo Burlingham:
[00:19:00]One of the things about Ray that made his exit a good exit was that he was very proud of the fact that whenever he went back to the company his former employees were very welcoming and had very warm feelings toward him and, you know, really totally welcomed him and were obviously wishing him well and they had good feeling about it. For him that was a very significant thing. It doesn't always happen that way, but it was very important for him and that it gave him … I don't even think he appreciated how important it was because it gave him peace of mind about what had happened to the other people who had been on the journey with him.
[00:19:30]
[00:20:00]When I actually sat down … You know, I would say when I began my interviews the most striking thing was that I began running into lots of people who were very, very unhappy. I mean, I would say that it was about half and half in terms of people that I interviewed although other people who have more experience who have more experience in this area than I do say it's more like seventy-thirty. Seventy percent are unhappy afterwards. When I found that I said, "Well, that's obviously the book I need to write. What's the difference between the ones who wind up happy and the ones who wind up unhappy?" One of the things I had to do once I decided that was …
[00:20:30]
[00:21:00]
[00:21:30]The book I needed to write, I had to ask myself, "Well, what do I mean by a happy exit?" When I'd looked at the people I'd interviewed, I realized that there were at least four characteristics of a good exit and for some people there was a fifth one as well. The first one was that they felt they'd been through a fair process and they'd gotten a reasonable reward for the work that they put into building the business. The second factor was that they could look back on what they had done and feel a pride in knowing that they had actually built something of value that had contributed something positive to the world and that they could feel pride about what they had done. Their feelings were not colored by, you know, other things.
[00:22:00]
[00:22:30]Then the third characteristic was that, and it was very important, was that they were at peace with what had happened to the other people who'd been on the voyage with them since nobody builds a company, at least a sell-able company, on their own. I could see that a lot of people were very, very troubled afterwards by what had happened to their former employees, or partners, or their customers. Then the fourth characteristic was that they'd found something afterwards that they could really become engaged in. Something that they could do afterwards that gave them a life after the business as opposed to sort of drifting around not sure what to do or who they were anymore, which happened to some people. That was the fourth and a very important one.
[00:23:00]
[00:23:30]The fifth was, which wasn't true of everybody but it was true of some people, was that their companies were going on without them and doing well which sort of gave them a sense of a legacy that they built something that could last after them. I found that those four or five qualities defined for almost everybody what a good exit was. If you were missing just one of them you could have a very bad exit. You know, if you felt that the process hadn't been fair and you wound up getting screwed you'd be upset about that. If you were so conflicted about what was happening that you couldn't look back with pride on what you'd done before, that could ruin everything for you.
[00:24:00]
[00:24:30]If your employees were getting screwed afterwards, that would be something that would make you very unhappy. If you weren't able to figure out what to do afterwards, that was a very common one and could make for a very unhappy exit. For some people, if their customers were not what they had … If their companies either went out of business or were not doing as well as they would have liked then that could make for an unhappy exit but that-
Ryan Tansom:It's interesting because your four to five characteristics, what I see in a lot of them is … All the owners that I know and the reason that I started my business, or my dad, or anybody that I've talked to it's you start your company for freedom and control, right?
Bo Burlingham: Right.
[00:25:00]
Ryan Tansom:
There's such a crazy sense of making sure that you're always trying to predict or envision the future and then trying to control whatever chaos that you've got in front of you and all those characteristics are showing that they either didn't envision something that they saw coming or it wasn't on their terms because they weren't able to, essentially, quarterback it. There's so many variables when you're doing the exit that it's hard to … They don't do this all the time. I think you said that in your book a couple times.
[00:25:30]
Bo Burlingham:
[00:26:00]
Yeah. Yes. That's very true, Ryan. Then when I actually looked at the specifics of what people who had happy exits had done in order to wind up with those those four or five characteristics, one of them for sure was … In fact, many ways the most important one was that they'd given themselves enough time to go through the entire process. A lot of people went into it and were actually totally unprepared for what lay ahead of them because they hadn't given themselves enough time and they hadn't actually gone through the whole process.
[00:26:30]
[00:27:00]I mean, that's a whole other issue because it really forced me even though I'd been at Inc and written about lots and lots of entrepreneurs and met lots and lots of entrepreneurs, it was sort of a revelation to me that the whole way that I had thought about the process that you go through when you start or you buy a company and that I had sort of the wrong idea about it. The whole way that I looked at an exit, I had the wrong idea about that too. I had to really revise those. I mean, I can talk about how I revised them. One of the things I realized was that when we talked about building companies that's exactly the way we put it.
Ryan Tansom:Right.
Bo Burlingham:
[00:27:30]
[00:28:00]
[00:28:30]The process is about building a company which is, you know, as if it's sort of a construction project. The goal of which is to wind up with a great company at the end. What I realized was that when you start or you buy a company you become an owner that, in fact, it's not a construction process, it's a journey, and like every journey it has a beginning, a middle, and an end. The end isn't when you build that company, the end is when you leave that company. That required you to sort of think about the whole process in a different way. A way that many people aren't aware of and aren't thinking about what they're doing when most people are not thinking … Most people are focused on, "Let's see if we can build something that will be viable and that will allow me to" … They think about wanting to start a company that's going to succeed in the sense that it will provide them with an independent source of income and-
Ryan Tansom:It's kind of like, going back to your construction process, when do you stop building? When do you open the front door and get to live in it, right?
Bo Burlingham: Right. Exactly.
Ryan Tansom:Go ahead.
[00:29:00]
Bo Burlingham:
That was one of the big revelations to me was that the whole way we think about the process that an entrepreneur goes through was flawed or at least the way I was thinking about it was flawed.
Ryan Tansom:It's interesting. I talked to this gentleman, he was actually on my podcast a couple of interviews ago and he told me that, he goes, "It's kind of like your parents are telling you how to live your life and you're like, 'Yup, yup, yup, yup.' 'You'll understand when you have kids,' and the all of the sudden you have kids and you're like, 'Ah, I get it.'"
[00:29:30]
Bo Burlingham:
Yeah. Right. Right.
Ryan Tansom:He said it's just like that where until you've sold your company you don't really understand. You can have all these people tell you it but you don't really get that that completes the journey on that one spectrum.
Bo Burlingham: Right. Exactly.
Ryan Tansom:Go ahead.
Bo Burlingham: No, go ahead. You go ahead, Ryan.
Ryan Tansom:
[00:30:00]I got an interesting question for you, Bo, because your few books, the Finish Big, Street Smarts, Small Giants, and The Great Game of Business are some of my absolutely favorite business books. The one thing that I keep going back to because … It kind of revolves around that number four, and the title of this podcast of Life After Business is how … Actually what Ali and Andrew do at Orange Cue is there's so much role identity fusion with the business owner and their company …
Bo Burlingham: Right.
Ryan Tansom:
[00:30:30]You had mentioned it a lot in Small Giants where, you know, you're talking about these companies that are just beautifully healthy in their cultures, and their communities, and what it takes to be a small giant and you constantly go back to a … I'm wondering can you be a small giant and finish big? I'm hoping that you can say yes and I believe that you will, but the reason I want to ask that question, Bo, is because I see entrepreneurs as artists, right?
Bo Burlingham: Right.
Ryan Tansom:
[00:31:00]I'm building a business right now and my dad did and the people that I hire reflect me, how I get my customers reflects me, everything is essentially me throughout the business so how can you step away and then start to look at your business like an investment vehicle, which you had mentioned that John Warlow does a fantastic job at that, and how can you have both? How can you go in and love and have the passion for your company like you want to, and have a small giant, and then finish big? Is that to-
[00:31:30]
Bo Burlingham:
[00:32:00]
[00:32:30]
You put your finger on something that is very of great interest to me, actually, because I have to say that writing Finish Big was one of the most educational experiences I've ever been through as a journalist because I found out so many things about entrepreneurship that I didn't understand before. Basically the people who build small giants face the same challenge that everybody else does. I mean, every entrepreneur exits their business. They may exit feet first but they're going to leave one way or another. I did have a chapter in Small Giants where I talked about how, in fact, most of the companies that I had written about were not prepared for what was going to happen. After I'd written Finish Big I went back and thought about all of those because … Actually, a new edition of Small Giants just came out with two new chapters.
Ryan Tansom:Yeah, I recently reread it and it's interesting because you went back and visited some of them.
Bo Burlingham:
[00:33:00]
[00:33:30]Yeah, right. Things had happened. The ten years was a very eventful ten years. We went through the great recession among other things and obviously that effected everybody, but it also got me to think about this question that you just raised, namely how does what I learned in writing Finish Big, how did that effect the company that is basically aiming to create a great company? Is that great company going to … A lot of people asked me, when I went out talking about Small Giants … Almost every time I spoke somebody would raise their hand and say they loved the stories that I told. They said, "It sounds like the leader is extremely important."
Ryan Tansom:Right, right.
Bo Burlingham:
[00:34:00]"Are these companies capable of remaining great after that leader isn't around anymore?" It was a really good question that people were asking me. I answered it honestly which is, not necessarily.
Ryan Tansom:
[00:34:30]It's so crazy because I a hundred percent agree with you. It's funny because you go back and forth, you want John Warlow's eight key drivers, you want to make sure you're not the hub of the spoke but then you go to Norm Brodsky and CitiStorage and he was calling customers. It was his personality throughout his whole company that allowed it to become what it is. I mean, I look at when my dad's business started shaking and having the wheels kind of rumble is when he disappeared, you know?
Bo Burlingham: Right.
Ryan Tansom:How to you take and take the charisma and the personality and breathe it into the business and then walk way? I just don't know.
[00:35:00]
Bo Burlingham:
I will say this, is that when I was writing Finish Big I made it a point of trying to find businesses that had exceptional cultures, like the Small Giants, and that had managed to retain those exceptional cultures through at least two changes of ownership and leadership.
Ryan Tansom:Interesting. Okay.
[00:35:30]
Bo Burlingham:
In other words I could find companies that had succeeded in doing it through one change but to do it through two changes, that really … Because the second time it's going to be very far removed from the founder. Is it going to remain an exceptional company the second time? The fact is, is that the only companies I could find where that was the case were either family businesses or employee owned businesses.
[00:36:00]
Ryan Tansom:
Crazy.
Bo Burlingham:
[00:36:30]When I thought about it I realized that's probably because the culture sort of needs guardians and, in one case, the guardians are the family. In the other case the guardians are the employees. I will say this is that one of the things when I talked to companies, to small giants or people who aspire to be small giants, the way I talk to them has changed as a result of writing Finish Big.
[00:37:00]One of the things I say to them is, "There are questions that you need to ask yourself early on like are you building a company that's going to last after you? Is that something you care about? If it is, if you're building a company that you want to make into a great company and you want it to remain great after you're gone there's a whole process that you have to go through which is extremely difficult and it's extremely important to begin thinking about it at a very early stage of the business."
[00:37:30]
[00:38:00]The person who has attacked that best, who I write about in Finish Big, is my friend Jack Stack at SRC Holdings. He's reaching a point right now where he's already sort of told the company approximately when he's leaving. It's not just him, it's the other people in the company and there are many key people in the company who are his age and they will all be moving on around the same time. To prepare for that there are all kinds of things he has had to do and it's basically taken him … I mean, I've known him for thirty years and he's been working on it for thirty years to try to get to that point and I think he's got a good shot at it actually right now.
[00:38:30]In watching what he has done to try to prepare for this and to try to prepare the company for it has really made me appreciate what a difficult process that is. I say to people the most challenging thing in business is not … I always thought it was to build a great company but I now realize that the most challenging thing in business is to build a great company that remains great after you're gone.
Ryan Tansom:Yeah, that about sums it up, doesn't it?
Bo Burlingham: Yeah, yeah. Yeah. It is.
Ryan Tansom:What do you think is the most challenging? Is it the emotional piece of it, right? There's so many financially driven entrepreneurs out there, right?
Bo Burlingham: Right.
[00:39:00]
Ryan Tansom:
Once they know where to focus on the financial piece or their customer concentration, all that is very tactical, right? Is there anything, whether it's Jack, or Norm, or some of these guys or gals that you've talked to that … What have the done on the emotional side to bridge that or make that journey easier?
Bo Burlingham:
[00:39:30]
[00:40:00]Norm, he specifically did not … For him he was not building something that he wanted to go on the same way as he'd run it after him. He thought about it and his hope was that the people who had worked at CitiStorage would have learned things and taken things that they could then take to other companies where they went afterwards, but that basically he didn't feel that he was building a company that was going to last indefinitely and be run the way … Have the same kind of culture and the same way of doing business that had been when he was running it.
[00:40:30]
[00:41:00]Jack is different in that basically his idea all along was to give the next generation the kind of opportunities that he'd had and that meant a lot asking people what they wanted. There were choices along the way. Did they want to go public? That was a possibility. Did they want to sell parts of the business to a private equity firm? Those were possibilities along the way. He just kept sort of throwing it back at the employees and asking them, so putting together groups that would actually ponder these questions about what did they want to do? The answer that always came back to him over and over again was, "Well, we sort of liked what we've got right now and we'd like to keep it going."
[00:41:30]
[00:42:00]That message was very clear to him and he said okay. He was going to focus on trying to set up this system that was able to last beyond him. One of the things that he said … Because I had many discussions with him about this. I ask him, "Is it possible for a very people oriented culture to last beyond the individuals who created it?" His answer was that he felt the answer was yes if you had a hard culture as opposed to a soft culture. When he meant a soft culture he said a culture that is totally dependent on the good will and fatherly instincts of the person at the top. He doesn't feel that that is capable of going on.
[00:42:30]
[00:43:00]If, on the other hand, you actually have a system, a way of running the company that creates the culture, that's different. That does have the potential to go on and that's where he's focused his attention from the very beginning which was building, as he puts it, a business of business people. People who know how to run a business and who can make the difficult business decisions that have to be made, they aren't exclusively depending on him to make those decisions. In many cases they're making those decisions themselves. Obviously he's one of them so he's helping to make those decisions but he's very focused on making sure that he's not the only one involved in that. There are other people.
Ryan Tansom:What Jack did was way ahead of it's time but isn't he pretty much the father of open book management?
Bo Burlingham: Yeah.
[00:43:30]
Ryan Tansom:
[00:44:00]
What I loved about your guys' book and what he did was call on everybody else like, "Hey, guys. We're all kind of in a heap of trouble, here's how you read financial statements," so whether it's the guy in the warehouse or you accounts receivable staff or the sales person, everybody is looking at the same scorecard because there's no reason … We were victim of it too where you feel like as the owner you're the one that should hold all the burden, and be alone, and be looking at the scorecard by yourself when everybody else is … They're technically your teammates.
Bo Burlingham:
[00:44:30]
[00:45:00]Right. You might want to be interested in another book, the one that sort of gets overlooked, it's the second book that I wrote with Jack Stack called A Stake in the Outcome. A Stake in the Outcome is more of the story of what happened and it includes a lot of the really difficult challenges that came up along the way. There were a lot of, at various points, crises that had to be overcome in order to do this and in order to build the company that they have, in fact, built. That story is told much more in A Stake in the Outcome then in The Great Game of Business. The Great Game of Business is really just laying out the system. A Stake in the Outcome is, as the subtitle puts it, building a culture of ownership. It-
Ryan Tansom:It's the raw story.
Bo Burlingham: Yeah, right. Right. The hard parts.
[00:45:30]
Ryan Tansom:
I can keep going on for hours, Bo, I love it.
Bo Burlingham: Okay. What do you want to do?
Ryan Tansom:I was going to say, because our listeners are made up of the people that you interviewed in all your books. If there's one takeaway or thing we haven't chatted about just yet, what would you leave them with?
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Bo Burlingham:
[00:46:30]
The people I mainly write about and the people, I think, who mainly are the readers of the things that I write, at least the ones who like what I write, are people who are building their own companies. They're entrepreneurs. I would say that the most important thing to understand … I mean, there are a lot of things that I would sort of advise somebody to do, one of which is sort of the idea behind Small Giants, namely what exactly is it that makes a company great. I think that when you look at the companies in Small Giants that's really the question that they put on the table.
[00:47:00]Different people will have different answers to that question but it's a question that everybody should be asking. Why are you doing what you're doing? What are you looking for out of business, out of work, out of life? If your goal is to build a great company, what exactly does that mean to you? In Small Giants I suggest what the people I write about, how they answered that question, it wasn't always identical in every case but there were some similarities.
[00:47:30]
[00:48:00]I think that that's a very important question for people to ask but if you were really to press me to say what I think is the most important thing, I would say it's very affected by what I learned in writing Finish Big, namely that you're on a journey, and that that journey is going to end, and that you need to think of it as a journey, not as a construction project. Construction project may be one of the things you do … It will be one of the things you do in the course of the journey but it's important to understand that the journey goes on beyond that.
[00:48:30]
[00:49:00]You have to think about what happens in the journey, you also have to think about how the journey ends and what's going to happen after the journey. Are you going to have another journey? That's fine. Is your journey about building this great company that's going to last after you? That's fine too. Or is it about building a company and then selling it for as much money as possible? I don't make any value judgments about that. I think that that's a fine thing to do if that what you really want to do, but the important thing is to be clear in your own mind.
[00:49:30]As I say in both Finish Big and in Small Giants, to be clear in your own mind about who you are, what you want, and why. I have found in the course of however long that it's been that I've been writing about entrepreneurs, and entrepreneurship, and entrepreneurial companies. The most important quality is something that is probably an important quality for everybody whether they have companies or not, whether they're entrepreneurs or not, namely to really understand who you are, what you want, and why. That's not always an easy thing to do. In fact it's a very hard thing. Most of of us spend our entire lives trying to figure that out. The great poets, and playwrights, and novelists.
Ryan Tansom:Philosophers and everybody.
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Bo Burlingham:
Philosophers, right, have written about the importance of the struggle. As Alexander Pope put it, "The proper study of mankind is man," meaning ourselves.
Ryan Tansom:Man's Search for Meaning, you ever read that book?
Bo Burlingham: Yes. Yeah, sure. Of course. Another one.
Ryan Tansom:Yup.
Bo Burlingham: Figures right into it.
Ryan Tansom:
[00:50:30]The intrinsic reflection of who you are is a lot more difficult than just quarterly reports, isn't it?
Bo Burlingham:
[00:51:00]
[00:51:30]Is sure is. The other thing is that when you get to be my age you realize that a lot of the times it's during the really tough times that you find out who you are and you find out what it is that really matters to you. That's a whole process that I say is something that you probably spend your whole life doing but it's something that you need to be conscious of that this is a challenge that lays ahead of you, and that you need to be working on, and thinking about. What I found with Small Giants was that all the companies, all the entrepreneurs who owned the companies that I wrote about were people who had very clear ideas of who they were, what they wanted, and why because they couldn't have made the decisions that they did if they … If you don't know who you are, what you want, and why what you wind up doing is what other people think you should do.
Ryan Tansom:Right. Listen to all the other voices that are just …
Bo Burlingham: Exactly.
Ryan Tansom:That are sort of guiding you.
Bo Burlingham:
[00:52:00]
[00:52:30]It was also very important with the people in Finish Big, the people I wrote about in Finish Big. Again, the way people get into trouble is if they are really unclear about what it is that's motivating them. I tell the story of Bruce Leech, who was one of the founders of Evolve in Chicago, and how he basically wound up selling a large chunk of his company to a private equity firm without actually figuring out what was it that he liked about his company.
Ryan Tansom:Found out after that, I bet.
Bo Burlingham: Yeah. He did. It took him a while but he eventually discovered what it was that he was missing. That's going to happen.
Ryan Tansom:Bo, I can't thank you enough for coming on the show. It's an honor because I just love your work so much.
[00:53:00]
Bo Burlingham:
I love the questions you asked, Ryan, and I love your story too. I hope you've told that in one of your podcasts. Maybe you should interview your father in one of your podcasts.
Ryan Tansom:Yeah. There's not enough oxygen in the room for both of us to talk.
Bo Burlingham: Okay. All right. I won't-
Ryan Tansom:That's for coming on the show, Bo, I appreciate it.
Bo Burlingham: It's really my pleasure, Ryan, thank you.
Ryan Tansom:Talk to you later.
Bo Burlingham: Bye bye.