3. September, 2008
There is no longer any doubt that in getting a “cold shower” from the economy;a lot of Latvian companies are already experiencing harsh times and will continue to experience them for some time yet. However, as an incorrigible optimist, it strikes me that there is good news too. Firstly, remembering my days as a student, I always had a clearer mind following a cold shower and new reserves of energy and ideas were awoken within my body. Secondly, in contrast to the disproportionately rapid growth of recent years, entrepreneurs are currently being forced to revisit their core values through the formation of product quality, employee development, organisational effectiveness and brand experience. For many companies, the economic crisis also means a significant reduction in volumes of business which is hard to accept psychologically, but which may even turn out to very healthy in the long-term.
Some time ago, Bo Burlingham, an American journalist and editor of several magazines, wrote an unbelievably inspirational book with the title, “Small Giants” which the Financial Times picked out as one of the business books of the year. It is a story about 12 different companies who made the deliberate decision not to be the biggest, but rather the best player in their fields. Among them Burlingham studied the cases of such model companies as Anchor Brewing beer brewery, Union Square Hospitality Group restaurant group (consistently rated among the Top 3 New York restaurants), Righteous Babe Records sound recording studio, Zingerman’s Community of Business delicatessen producer and another eight “small giants”.
Listening to the stories of the heads of the chosen companies about the course of development of the companies nurtured by them, as well as the challenges they faced, their mistakes and success factors, the author of the book arrives at several interesting conclusions which are true to all of these success stories.
Firstly, the priority of all of these companies is to create an outstanding product or service, as opposed to a desire to be the biggest, fast growing or most profitable company in their field. More precisely, they are constantly fighting to stay small, inimitable and manageable. For all of the bosses of these companies, the product they have created is firstly the fruit of a heartfelt love and only secondly a source of profit. Secondly, each “small giant” has its own special mojo or magical charm which can be felt by both its employees and clients. In marketing this could be referred to as the brand personality which is unique to these small giants. All of these companies possess a common operational thread characterised by sympathetic and close relationships with employees, clients, suppliers, society and the environment in which they are operating. And not infrequently, providing direct support to the local community becomes the highest challenge of all, the big mission and source of joy. And as everyone knows, it is not possible to buy true joy.
There are various obstacles to being and remaining the best. Firstly, there is a prevalent stereotype in society and the business environment that a company’s success is measured according to data regarding the increase in its turnover. This necessitates continual expansion, development of new products, services and distribution channels, regional and international development which more often than not undermines a company’s ability to retain its outstanding quality standards and preserve personal relationships between employees, suppliers, partners and clients. Likewise, increased pressure comes from a growing number of clients who have come to trust a wonderful product and have recommended it to their friends and acquaintances. Accordingly, rapid growth goes hand in hand with the huge possibility of becoming less competitive and becoming average or good, but no longer being outstanding.
This prompted me to think that in light of the continual and unsuccessful search for a Latvian Nokia, perhaps we should strive for excellence on a smaller scale locally rather than continually attempting to create our own CocaCola, Apple or Bodyshop.
The first and most visible small giant in Latvia which came to my mind whilst reading the book is the Vincents restaurant. It conforms to all of the criteria for a small giant, particularly so, taking the recent past into account when Vincents deliberately reduced its volume of business and decided to stop serving lunch so that it could devote all of its energy and imagination to an unforgettable and gastronomically pleasure filled dinner experience. The face of Vincents and its main chef is a man whose name is known to almost every resident of Latvia and almost every prominent visitor to Latvia and who can often be seen in the presence of diners whom he is introduced to and often entertains with his captivating range of stories. Mārtiņš Rītiņš has trained Latvia’s best chefs of whom the majority have gone on to open their own restaurants. This is a chef who knows each of his suppliers personally, who actively works for the benefit of society by tirelessly explaining the value of healthy nutrition and promoting the slow food movement and who in the near future is planning to open the doors of Latvia’s innovative school of gastronomy.
The achievements of our BMX riders are also founded on an attitude true to “Small giants”;many years of enthusiastic work and refinement of specific skills right through to the attainment of global excellence. Yes, in sport too, small nations ought to concentrate on individual niches and becoming outstanding and unbeatable in them rather than attempting to compete with major countries in big, investment-rich sports.
I am convinced that the economic crisis will facilitate the competitiveness of Latvia and its entrepreneurs globally, because it will force us to think not only about what we are doing, but also HOW WE ARE DOING IT. And small giants are our big opportunity…