Episode with guest: Bo Burlingham
(This episode was recorded in January of 2021.)
Key Episode Take-Aways:
1. Sometimes you try and do the right thing, and the wrong thing happens. (click to jump to this topic below) -There are things that happen because of personalities, because of people. Sometimes you try and do the right thing, and the wrong thing happens.
2. The businesses have an obligation to educate their employees to understand what capitalism is. (click to jump to this topic below) I say that this level of ignorance in the general population is the fault of business. The businesses have an obligation to educate their employees to understand what capitalism is.
3. Knowing what to do depending on the size of your company. (click to jump to this topic below) Once you get to a certain size, if you're small, what you want to be is unique in your environment. You want to be a place, let's say a store, where local people can get something that they can't get anyplace else.
Continue scrolling to read the full episode transcription.
Welcome to the “Change the Game” Podcast, where we share stories of open-book management and highlight capitalism at its best. Thank you for tuning in to this episode of the “Change the Game” Podcast with special guest, Bo Burlingham. In this episode Rich and Steve will talk to Bo, about how he got involved with the Great Game, the role capitalism plays in society, and how a Marxist becomes a capitalist. Here's your host, Rich Armstrong and Steve Baker.
Steve Baker 0:28
Welcome to the “Change the Game” Podcast, where we're changing the game by doing business differently and highlighting stories of capitalism at its best. We believe businesses have the potential to make a positive difference in the world, and that they can empower people to pursue their dreams and benefit our society as a whole. I'm Steve Baker and with me, as always, is my co-host and president of the Great Game of Business. Rich Armstrong. How are you Rich?
Rich Armstrong 0:54
Good. How are you, Steve? Good to see you. Happy Holidays.
Steve Baker 1:07
Very well, very excited today. Yeah, for sure.
Rich Armstrong 1:00
We are very close to finally wrapping up as wild and crazy year. So Happy Holidays to everyone. Well, hey Steve, we're really thrilled to welcome a very special guest today, Bo Burlingham. Bo is a contributor to Forbes where he produces the magazine's annual Small Giant section. He previously worked for 33 years in Inc. Magazine as senior editor, executive editor, and editor at large. But our community knows him best as the co-author of the Jack Stack book The Great Game of Business and their second book Stake in the Outcome is also authored many other best-selling books, including Small Giants, and his most recent book Finish Big. I should also mention that Bo is the co-founder of the Small Giants Community where business leaders focus on growing with purpose. So welcome, Bo and glad you could join us.
Bo Burlingham 1:49
Well, it's an honor to be here Rich.
Rich Armstrong 1:52
Steve Baker 1:54
Well, Bo, you wrote the foreword for Jack Stack and Darren Dahl's new book Change the Game. And in it you recount how radical it was for Jack to run SRC, under the notion that most people of any organization really are capable of understanding what it takes to win and that they're actually eager to do what it takes. And that they will do it as long as they have the information and tools they need to contribute meaningfully. So, my question is this just how weird was it back then, for a company to teach people the numbers?
Bo Burlingham 2:24
It was, believe me, we at Inc. had never heard of it before. It was, I mean, we didn't know if it, it just went against everything that was sort of common wisdom about running a business. It was like, in fact, the opposite was true. I mean, people were advised to make sure that you didn't share the numbers with anybody that you kept it close to you kept everything really close to your vest. And, you know, I have to say that when Jack first began appearing at our Inc. 500 conferences, people thought he was out of his mind. And they, you know, they couldn't believe that this was actually working. I mean, and you know, I think that, you know, that a lot of people really, were just sort of shocked to hear what he was doing, and had no, really couldn't believe that it was actually working. Couldn't believe that people at SRC actually sort of understood anything about the numbers of the business. And, you know, that was a long time ago. I mean, looking back now, it seems, it seems crazy. And actually, we felt at the time, I have to say, when I was working on the book with Jack, the day would come when in fact, it would be the reverse. And people would say, wait a minute, you actually ran your company without telling anybody what the numbers were? How do they know what to do? You know, uh, and, you know, I don't know if we're at that point right now, but we're getting pretty close to it. And, you know, a lot of has to do with what you guys have been doing at the Great Game of Business.
Steve Baker 4:27
In that foreword Bo, you quote, Dr., I'm going to try this name. Ichak Adizes, is that right?
Bo Burlingham 4:36
Yeah. Dr. Ichak Adizes. Yes.
Steve Baker 4:39
His twin pillars of a healthy culture, mutual respect and trust. And there's no better way to show mutual trust and respect than by teaching people CEO level stuff, right? Because that's, that's the inside club. How else have you seen companies try to foster trust and respect if they don't share the financial information?
Bo Burlingham 5:01
Well, you know, I mean, there, there are a lot of companies that sort of do good things, and they're very nice to their employees. And, you know, whether that fosters trust and respect, I don't know. If they foster trust, I mean, if they have a, if the company has a history of really treating its people very well. But it's not the same as the Great Game or, you know, I hesitate to use the term open-book management, because I think people misunderstand that term all the time. They think it's just about sharing the numbers. And as you guys well know, it goes well beyond sharing the numbers. I mean, it is really a whole way of running, if you're going to get the really the maximum benefit out of open-book management, the only system I know, that actually allows you to get that benefit is the Great Game of Business. Because there's so many other elements to it, besides just making the numbers available. It's not even a question of making the numbers available. That's, that's part of the problem with open-book management is that people think that, you know, CEOs will say, Oh, yeah, we're an open-book company. You know, people can look up our numbers, whatever they want, well, who's going to do that? But most, most people don't want to be accountants. To me, that's not there's not any management part of that it may be open-book, but it's not really management. And it really is the requires the system of the Great Game of Business, which has many parts to it, I don't have to tell you about that. And, you know, a company really has to apply those if they're really going to get the benefit. And, you know, I tell people, when people ask me, I say, well, you shouldn't do it, unless you really believe in it. Because it's really hard to do. And it requires a lot of work. And you've got to stick with it. And you can't, once you start doing it, you can't stop doing it. Because once you start telling people what's going on, you can't turn around a year later and say, well, we're not going to tell you about that anymore. It doesn't work that way. And, you know, in terms of mutual trust, and respect, I think that on the deepest level, it is really something that the Great Game fosters. You know, I think you can create a certain level of trust by doing other things without the Great Game. I mean, I know companies that do have a lot of trust with their employees. If you look at the great places to work tests that they give to all these companies. You know, I talked to Robert Levering who's, you know, pretty much the founder of that. And I said, you know, what are your tests? What are you trying to test when you go in? And he said, it's easy, we're testing trust. That's, that's what it's all about. It's about trust. So, you know, in terms of the companies on the great place to work list, the ones with the highest scores have a high degree of trust. They don't have unless they're playing the Great Game of Business, unless they're practicing the Great Game of Business. They don't have it at the same level, that companies that do practice the Great Game of Business have it.
Steve Baker 8:46
Rich Armstrong 8:48
Well, the world could use a little bit more trust and respect, right? Right now.
Bo Burlingham 8:56
Yeah, right. I mean, we don't have much trust anywhere right now. [Laughter]
Rich Armstrong 9:02
Well, is pretty foundational. Hey, Bo, you get you know, you have the opportunity to really talk with a ton of entrepreneurs in your day-to-day work. What are they talking about right now? And what, or how is it maybe different than, let's say, a year ago. [Laughter]
Bo Burlingham 9:21
Well, a year ago, there wasn't a pandemic. We're getting up to the one-year anniversary of the pandemic. And basically, everybody is talking about surviving. And that's hard for a lot of companies. I mean, you know, it's particularly hard in a blue state like California where I live. That's where the powers that be are shutting everything down and telling people to stay at home. I take long walks every day and one of the things sometimes when I walk through town, I walk by these restaurants. And it's so sad, because, you know, they've set up, and they've really done everything that they could to set up outdoors so that they are actually serving people outdoors. But now they've been told they can't do that anymore. And there's absolutely no scientific evidence that suggest that restaurant dining outdoors is a source of spread of the virus. You know, there are certain people who like to walk around talking about how they're all going, always going to obey this science, as opposed to get, but in fact, you know, here we are in probably the most liberal state and in the in the country. And the last thing they're doing is paying attention to the science. What they're paying attention to whether the whims of the politicians. And it's really just, it's very sad. I mean, I think, you know, there's a, it's, I think everybody really has to sort of be focused. I mean unless you're in one of those businesses, which happens to be thriving during this period, because you have, you know, Zoom, for example, Zoom Communications is going through the roof. And, you know, they're doing great. I guess Amazon is doing great. You know, if you have a, if your business sort of caters to, you know, to people who were forced to stay at home and forced to deal with it, then you're lucky. But that's obviously a very small percentage of businesses. I would imagine and Netflix is doing very well. [Laughter] Netflix was inspired by, you know, Reed Hastings was inspired by the Great Game of Business. I don't know that they have applied it in anywhere near the depth that SRC has, but at least they understand that it's an important thing. And I'm sure right now, they should be doing very well.
Rich Armstrong 12:34
Bo Burlingham 12:35
What are you going to do if you're staying at home? You're going to watch Netflix.
Rich Armstrong 12:38
[Laughter] Yeah, exactly, exactly. We had the opportunity to listen to you a bit on a previous podcast you did for Small Giants and Paul Spiegelman. I thought it was really interesting, as a young man, I heard on that podcast that you're kind of an extreme radical working kind of against the institutions and capitalism when you're in younger days. And you sell that a lot of what you believed about business was wrong in working at big financial companies and Inc. Magazine tell you a lot about business. But I'm curious, what specifically about working directly with Jack Stack and SRC kind of shaped your beliefs around business and capitalism in general?
Bo Burlingham 13:22
Well, it has had a huge effect. I mean, it was my I would say it was my major education. As a, as certainly as a business writer. And you know, that was one of the reasons why when the question came up about what would I go to work with Jack on the Great Game of Business book. And, I mean, I was executive editor of Inc. Magazine at that time, and that was a pretty demanding job full time. And, yeah, I knew that if I were going to work with Jack, I was going to have to give that up. So, I decided, yes, I should do this. And one of the reasons that I decided that I should do it was that I didn't think I understood business very well. And that's true of most business journalists. Most business journalists don't have the faintest idea about business. They just flying blind. And I realized that if I were going to really understand what makes a business work, I needed to get into the numbers, and understand them and I needed to look closely at how an open-book company worked. The other thing was, you know, at that point, we'd run a lot of stories. And, frankly, some of them, I didn't really believe that some of the stories we run, were about companies and we talked about how wonderful they were. I wasn't, I wasn't really sure that I believe that they were, that was really the case. Now, at that point, as far as I was concerned, SRC was the most wonderful company we've written about. It was doing the most interesting things. And I thought that the opportunity to go out and really, you know, let's see, let's see how people really feel about the Great Game, about knowing all the numbers and that sort of thing. And, you know, I was also, you know, wise enough to know that it doesn't always go well. It doesn't go well, for it doesn't always go smoothly for anybody. And I knew that there were bodies buried someplace. And I wanted to know what those bodies were and how it happened. And you know, so, I came out to Springfield, and, you know, spent a lot of time, and got really, you know, that's when I was staying with Joe and Lana. Also stayed with the Rourke's. You know, I did see what the where the bodies were buried and what had gone wrong. And, you know, Jack knew that I was looking, that I was asking people questions about and, you know, there was, you remember the, the automotive plant down in Willow Springs?
Rich Armstrong 16:43
Bo Burlingham 16:44
There were a lot of horror stories coming out of that plant. And I heard about them. And I talked to Jack about them, right. You know, he explained what happened and why it had gone on for as long as it did. And, you know, once I got to the through once, I sort of once we finished writing the books, you know, I said to Jack, look, I came out to see what was wrong here, what was not adding up. And I will say this Jack, the basic thing, what you're trying to do here is honest, I've looked at it. I've looked for all the cracks I could find. And you know, there are things that happen because of personalities, because of people.
1. Sometimes you try and do the right thing, and the wrong thing happens.
Sometimes you try and do the right thing, and the wrong thing happens. But the sincerity of what you're doing, and the honesty of how you're going about this, I can vouch for. And I will vouch for it. I mean it was a very educational experience for me, obviously. And the thing is this, is that there are certain instincts that I had as a young man. And values that I had. I mean, I was always for the underdog, obviously. I thought that the reason I was so far left was that I saw so many people getting screwed. And things look so bad. I mean, I can identify with these kids who are, you know, talking about socialism now. They have to, at some point, grow up and learn a thing or two, but that can be hard. I mean, I have a lot of friends, frankly, from the 60s who never did learn anything. They still don't. This is there still is sort of blinded, as they were back then. You look at somebody like Bernie Sanders, I mean, I know people like Bernie Sanders, and he's a type. He hasn't learned anything in the last 50 years. I mean, you know, people, you know, there can be mass murders in Cambodia. There can be dictatorships in Nicaragua and Venezuela, and Cuba, and people can be really harmed. And he still hasn't learned anything from that. He still has not asked basic questions about, you know, what really, how is a job really created? What does it take to create a job? And a good job, a job that, you know, pays a living wage and so forth. And, you know, he thinks, you know that people like Bernie, think that the government can do that. It just shows their ignorance. Governments don't create jobs, they don't create real jobs, they don't create value. And they don't really, the best thing that a government can do really is to stay out of the way. And if anything, just make sure that the rules are obeyed. And that people are sort of playing on a level playing field. But other than that, you know, the last thing you want to do, if you can avoid it is to have them actually having the government actually do things. But I will say this is that, you know, what I'm saying is that, in my youth, I thought things were screwed up. And I thought the way to do that was, you know, through a revolution or something like that, to bring in socialism. When I got the Inc. Magazine, one of the things that was an eye opener for me, was to meet entrepreneurs, who were, you know, number one, very idealistic people. And many of them really wanted to sort of create little societies in their companies that were better. And, and I would say that Jack, was sort of the extreme version of that. He was willing to do the furthest toward actually creating within a company a society that had the kind of rules that anybody, any reasonable person would look at and say, yes, that's the way things should work. And you know, when I, when I think about Change the Game, the new the book, he wrote with Darren Dahl. Basically, what he's doing is he's saying, look, you're going to get better performance at anything if you explain to people how it works. I mean, the idea that, you know, which is sort of somehow built into our culture that, you know, you should ask people to do things and not ultimately telling them how it works, and what is going to produce the kind of results that you're looking for. Then of course, things are going to get screwed up. And things are screwed up throughout the society. Unfortunately, I mean, you know, I can't say enough about the role the Great Game has played, in terms of really sort of changing fundamentally perspectives of business. And it's gotten a lot of respect from a lot of people, including some of the ones who, you know, you've had at the gathering, for example. You know, people like Reed Hastings, but many, many others, as well.
Steve Baker 23:12
I really like what you were saying Bo, about creating little societies, within companies that entrepreneurs that you met in your early days in Inc., and then Jack took it to the next level. And I just remember reading about Tomáš Bat'a in Central Europe before the Second World War had created a shoe factory. And it became a village, and it became a city and all that, of course, World War II, destroyed all that. But just amazing how it's like, hey, what if we could actually create something better instead of waiting for someone else to do it from the governmental standpoint. So, here's a question for you, after walking through that whole idea of, of how socialism, you know, appealed when you were younger. In fact, I think you said on a previous interview that you were a Marxist, so even some communism in there.
Bo Burlingham 23:59
I was a communist, there's no question about it.
Steve Baker 24:02
So, let's just flash forward. I mean, 75% of the workforce will be millennials in the next five years. There are so, I got three kids. I mean, Rich, you've got kids, too. And we're like, what questions should our young people be asking? Who are currently leaning toward a very socialist kind of feeling? Because they don't know any better? I mean, they can't listen to us, Bo, we're dad.
Bo Burlingham 24:26
No, but they can, they can look at the company that you work for. So, the major thing is that when people start talking to them about business, and about how profit is evil, or something like that. They say, they can say no, that's not how it is. That's not how it works. You need profit you know, it's something that you need, you can't have a business without profit. And if you make a lot of profit, that just creates a lot for people to share inside if you run the company right. So, you know, I did that session with, there's this level of ignorance in the general population in the United States about what it is that has created the kind of society that we have. And, you know, I did this session at the gathering with Doug Tatum, in which we talked about the test that he came up with for his students at the University of Florida or wherever he was teaching. And he began to notice that a lot of them, you know, had this attitude towards profit, that it was evil. And he came up with a test, where he asked people, here, there's two ways to look at profit, and tell me which one you think is true. Profit, in fact, shows the kind of value that you're giving to customers. It's a reflection of the value that you're giving to cut. That's one way to look at it. The other way to look at it is that profit is a trick. It's a trick that companies play on customers without their knowledge, to take more of their money. Now, which of those do you think, in fact, identifies how businesses work? Well, you know, I forget what the actual number was. And something like 75% of the people said, It's a trick. It's a trick. And these were business students he was giving this test to and then he talked to another one of his another faculty member, and told him this story. And the guy said, No, no, no, that can't be true. And then he gave it to his class, exact same result. And then they went out and they hired somebody to go and give it to the general population, exact same result. And so, you've got a whole population that thinks that business is basically tricking you into paying more than you should be paying for something, you know, when you have that sort of a, of a mentality in the general population. It's no wonder that there are really bad results that come from that.
Steve Baker 27:39
No, great answer. That is real statistical proof that the level of ignorance in the US as you put it, is rampant, and it's the norm. And the crazy part is, is we all believe, you know, as Jack's subtitle for the for the new book is Saving the American Dream by Closing the Gap Between the Haves and the Have Nots. And he's figured out that business and financial literacy is one of the things that really separates folks, and I think you've reinforced that. So, we know, we all believe, at least on this podcast, that business can be a force for good. So how Bo, how can business be a force for good?
2. The businesses have an obligation to educate their employees to understand what capitalism is.
Bo Burlingham 28:22
Well, I say that this level of ignorance in the general population is the fault of business. Business, you know, and business is going to pay for it. The businesses have an obligation to educate their employees to understand what capitalism is. And they haven't, aside from the folks who follow the Great Game of Business. They haven't, you know, business in general haven't done it. And, and the result is that they get this toleration of socialism. I mean, you know, that it's out in the country, and it is going to come back to haunt the business community, in less businesses recognize what is happening, and take on the responsibility of making sure that their employees in particular, but also, you know, in general, people understand what they're doing, you know, and how the system works. I mean, I think I realized now that in fact, the whole attitude towards capitalism is wrong. I mean, capitalism is a system that has allowed us to create wealth and virtually eliminate poverty. It wouldn't have happened without capitalism. Capitalism is a blessing. There are people who, you know, as with anything else who have exploited, you know, not so great purposes. But overall, if you look at the overall effect of capitalism, I mean, you know, it's not hard to understand that this is capital. I mean, even the Chinese basically recognize that capitalism as an economic system was, in fact, a far superior economic system. Of course, they have a Communist Party, which runs the country, it’s really a sort of a totalitarian. It's gotten worse under the current leadership of China. It's gotten even more totalitarian, which is, you know, one of the reasons how we wound up with this pandemic, obviously. You know that’s what Deng Xiaoping recognized after the Cultural Revolution, when basically Deng Xiaoping came to power, he recognized that there had to be a fundamentally fundamental change in the way that the economy of China was organized. I mean, I remember I actually, I went to China in 1985. I was on an Inc. trip and I went to Hong Kong. And then from Hong Kong afterwards, we had a great trip to Hong Kong with, you know, was an experiment really for Inc. Magazine, to see if they could set up this sort of touring tourist business, but they didn't keep up with it. But I got to go on the first trip to represent the editorial group. And it was a great experience. And, you know, it was right at the time, when Deng Xiaoping was opening up the Chinese economy. I remember we went to Shenzhen, which was, you know, at that time, just this little, this little sort of frontier outpost. I mean, it was like going back to Oklahoma City or something like that, in the early days, you know, where there was sort of dust in the streets. You know, you sort of half expect horses, you know, cowboys to come along with their horses. But it was just, you know, now it's this huge city. I went back again, eight years later, and Shenzhen was the size of Chicago. And it was amazing. But I remember the first time I went there, there was a big sign on a building. And I asked our guide, what is that sign? And he said, Oh, it's a saying of chairman Deng. I said, Really? And what does it say? It says, "time is money". I said "what?" "Time is money". That's a Chairman Deng? He said "yes, that's a saying of Chairman Deng. Said "I thought it was Ben Franklin who said that". And, and in fact, I was so sort of amused by this, that I got somebody, I actually went to a calligrapher to sort of recreate this sign for me. So, that I could bring it home with me. But you know, that was what was going on. They were changing the mentality, really, of the Chinese people. And, you know, frankly, China would still be, you know, a backwater like Russia if that hadn't happened, if that age hadn't happened. And, you know, I mean, I'm going off, obviously, but the point is, is that my point is, is that capitalism is the mechanism that really allows people to uplift themselves and to improve their society. And that socialism, in fact, has the opposite effect. I mean, I remember, it took me a while to understand this obviously. I remember talking to Jack about it at a very early time when I was still sort of undergoing my education. And, we said something, we were talking about taxes. And he said to me, well, would you rather have politicians in Washington spending your money or people like me spending your money? And you know that was, that wasn't difficult choice to make.
Rich Armstrong 35:40
I think you said it best earlier that it's, you know, the community, Small Giants is one of them. But you have Conscious Capitalism, you got B Corp, you got, you know, the Tugboat Institute, and Evergreen Movement, all are trying to, you know, to highlight these businesses that are doing it right, and that are trying to teach people what this can mean to them, and what this can do for society. But there's a lot of movements, right. My question, I guess, is really, how do we how do we combine those efforts? How do we work closer together as communities to really be kind of an unstoppable force? And, you know, rather than divide and conquer, let's see if we can, you know, group efforts, and really try to make a difference?
Bo Burlingham 36:22
Well, I thought about that question. Because I guess I've had the same question that you have, which is, wouldn't it be more effective if we had some level of coordination? I eventually came to the conclusion that no; it wouldn't be more effective. The thing is that people in these movements have a sense of identity, they feel very strongly about. You know, the fact you know, you look at something like Small Giants and Tugboat for example, both of which I'm involved with. There are people, there are quite a few people, actually, you look at Tugboat, Small Giants, and the Great Game of Business. And there are people who are involved in all three. And, you know, that's great, actually. And it's, I sometimes want to get curious and want to find out, why is it that somebody belongs to the Small Giant's community and decides to join Tugboat? You know, it's easy to understand why people want to be part of the Great Game of Business community. Because if you're talking about what is probably, I mean, I've said many times people ask me, you know, given that I've been looking at the way companies are managed for 40 years now, what would I conclude? And I would say that, you know, that, without that the most effective tool that anybody can incorporate to improve the functioning of their business, is the Great Game of Business. You know, there's nothing else that, you know, remotely has that sort of an impact. I mean, there are other ones that I do, also, I mean, I think that Zingerman's came up with a visioning process, which I think is very important and is a very important tool. I also think that, you know, the whole Net Promoter Score is another tool that has become very important, but nothing really has had has the kind of effect on a business that the Great Game of Business.
Rich Armstrong 39:08
But I think, if they understood, I mean, it's kind of an interesting point that you're talking about, though, is that there's certain identities for each one of these communities and they get very passionate about an identity right. And maybe dividing and conquer is an effective way of doing this.
Bo Burlingham 39:28
Well, I think that, you know, I guess when you look at the individual level, it's in terms of why there's something about one or another of these communities, that really attracts certain people. And whatever it is, you know, that's fine. I mean, if you look at Small Giants and Tugboat for example, the communities are different. Tugboat is not about, you know, small. I mean, companies is about Evergreen companies and building a company, you know that can last forever. And what are the qualities that allow them to do that? You know, and then you have Small Giants, where in terms of the values that Small Giants promotes, they're pretty much identical to the Tugboat buyers. That said, I can I get an awful lot out of participating in the Tugboat events that I don't necessarily get from the Small Giants' events. But I get I do get things from Small Giants that I don't necessarily get elsewhere. And would it, if you were to put them all together, I think you lose more than you would gain.
Rich Armstrong 41:01
Bo Burlingham 41:03
I mean, there are certain ones that, you know, you look at Conscious Capitalism, Conscious Capitalism is a whole different thing. You know, it's a very positive, it's a good idea. And it's doing a lot of good in the world. But I'm not involved with Conscious Capitalism at all, but I respect it. You know, I wish them every success, but it's not worth my time, frankly. I mean, I've got my hands full, trying to support the Small Giants community and the Great Game of Business, particularly now that you've honored me by asking me to be on the board. And Tugboat. I don't have time for anything else. And I don't, I also don't see anything that compelling about Conscious Capitalism that I can't get other places. So, you know, I don't want to be negative about them at all, because I think they're doing good work. But
Rich Armstrong 42:14
I think we're often at the same kind of mission, right. And I think you're making a huge impact by the efforts you're putting into these other organizations, Bo. So, I you know, it does make me think a little differently than answer because I think, you know, you're driving innovation, you know, it's a similar to kind of how we look at our businesses, right? Is that is it better us being separate business units that drive more entrepreneurial innovation than being a consolidated organization where sometimes you dilute that, that innovation? So, yeah, that makes a lot of sense.
Bo Burlingham 42:44
That's a very good point, Rich. You do, sometimes you lose something with size sometimes. You know, depending on what your goal is what you're trying to do. That's either good or bad thing. I mean, you look at something like Whole Foods, obviously, which is, you know, john Mackey's, he spoke at a gathering early on. And, you know, John was a Small Giant, Whole Foods was a Small Giant in Texas, I guess it was in Austin.
Rich Armstrong 43:18
Bo Burlingham 43:19
You know, John, and there were these little sort of all natural, or Whole Foods type markets is one in Boston called Bread and Circus. And there was one in Los Angeles called Mother Gooch's. And they were all over the place. And John Mackey was the one who said, no, I want to really build up, make this a national business. And that's why he decided to go public to get the capital that he would need to acquire these other businesses. And so, he did, he got the capital, and then he went out, you know, he bought all of these other businesses and turned them into Whole Foods markets. And there's no question that by doing that, he had an enormous effect on the country, and on the consciousness of people throughout the country. Something they did, I think he can't deny it, they also lost something. That, you know, if you talk to people who were part of Whole Foods at a much earlier stage and ask them to compare what it was like then to what it is now, that you know, they'll tell you it's night and day.
3. Knowing what to do depending on the size of your company.
You know, part of that I write about in Small Giants, which is once you get to a certain size, you know, if you're small, what you want to be is unique in your environment. You want to be a place, let's say, a store, where local people can get something that they can't get anyplace else. Once you're large, you want all their different stores to offer the same experience. So that if you go into a Whole Foods in San Francisco, it's pretty much the same experience, as if you go to a Whole Foods in Springfield, Missouri, or Boston. And, you know, there's nothing wrong with that. That's just the way it is, it’s just different, different strokes for different folks, I guess.
Steve Baker 45:42
Those are the two things I pulled out of that was, I like your point Rich about the different companies driving innovation instead of one big one, you might just be focused on one area. But Bo, I also like what you said about identity, because belonging is a basic human need, we all want to belong to a tribe. So, I can now go find my personality reflected in a tribe and, you know, have the people, you know, that I want to surround myself with. So that's a really, really good point. Let's, let's shift gears a little bit and talk about you Bo, what are you working on? What's next for Bo Burlingham?
Bo Burlingham 46:16
Right now, I'm surviving the pandemic. I mean, I live in California, we're under stay-at-home orders. I do go out for these long walks. But basically, Lisa, my wife and I stay at home. Our daughter, my daughter, our daughter, and son in law, and grandchildren are nearby. And so, we do see them. But we can't, you know, we sort of have to, you know, wave to them. Because we can't get too, too close. And then I'm also working with Dave Horton, on a book, it will actually be Dave's book. I mean, it will be it will be the first person by Dave. It's about the journey that he went on, going from absolutely the center of Silicon Valley, to the whole Evergreen Movement and the transformation that he went through. The way that people think about business in Silicon Valley, is just entirely different from the way that people think about business in Springfield, Missouri, for example.
Steve Baker 47:40
Bo Burlingham 47:41
They're just two starkly different ways of looking at business. And he was somebody who was really sort of pretty much the number one venture capital firm, working with the number one venture capitalists in the world during the most exciting period, creation of new companies. I mean, you know, John Doerr, who was his mentor, who he worked with at Kleiner, Perkins, John Doerr, he became a star really, because he was a lead investor in Netscape. And, you know, and then he discovered Amazon, he became the lead investor in Amazon. And then he discovered Google, and he became the lead investor in Google. You know, and Dave was sort of his right-hand man. And, you know, to go from that, to what he's doing now, he's now looking at companies that think about business in an entirely different way. You know, you take something like growth. I mean, in the, in Silicon Valley, the whole thing is fast growth, you know, the fastest possible. Well, why is that? Well, it's because they have investors’ money, they have venture capital, and the investors want a return on their investment. You know, you look at Evergreen companies, you know, and SRC is absolutely a classic example. You know, it hasn't grown 200% a year. It's, it's grown, but it's, but it’s done it over a long period of time. And if you maintain that growth, year after year, over 30 years, or over 40 years, you know, what you get is a very valuable company. I mean, SRC today is a very valuable company. The whole way that you look at innovation is different. basically, in Silicon Valley, innovation is you have an idea and then throw a lot of money at it and see what happens. In the Evergreen world, innovation happens much more slowly. And basically, it comes about by coming up with an idea. And then finding customers who liked that idea and are willing to pay you for that idea. And then using, actually the customers are sort of financing the innovation. And, you know, these are all sort of real points of difference between the two. And I, I've learned a lot just by working with it, because I didn't ever really get that heavy into Silicon Valley. And that whole way of things. Because at Inc. we didn't really focus on that. I've learned a lot from Dave, about how business looks and looked in Silicon Valley. Of course not, you know, California is typically sort of killing the goose that laid the golden egg. And you have Oracle, you know, Hewlett Packard, you know, Tesla, they're all moving to Texas.
Steve Baker 51:14
Mm hmm. Yeah.
Rich Armstrong 51:19
So, Bo, what, with the time we have left, I'm just curious what, what's one question we should be asking you right now? What did we miss? We've covered a lot. What have we missed?
Bo Burlingham 51:32
Frankly, Rich. You've asked me every question I could possibly think of.
Rich Armstrong 51:37
[Laughter] And that's coming from a journalist.
Steve Baker 51:41
[Laughter] You broke Bo, Rich. You broke him.
Bo Burlingham 51:48
We could talk about sports.
Steve Baker 51:53
Is that the thing where nobody goes? Yeah,
Bo Burlingham 51:56
Yeah, right. Actually, I have to say that the more political, the sports get, the less interest I have in it. It's just like, no, I don't want these guys telling me what, I don't care what they believe politically.
Rich Armstrong 52:14
It's supposed, it's intended to be an escape.
Bo Burlingham 52:16
Yeah, yeah, exactly.
Steve Baker 52:18
Bo Burlingham 52:19
I mean, I was a very, very big, Golden State Warriors fan when we lived in Oakland. And that was a very exciting time because they were so good. And then of course, I lived for 40 years in New England. And I was a very big New England Patriots fan.
Rich Armstrong 52:37
Bo, sorry. What? [Laughter]
Bo Burlingham 52:43
Well, you know, you've got you got the chiefs now. You know, they've got the two key things they need is a great quarterback and a great coach. Just as we had, the New England patriots, we had the two things you need, which is a great quarterback and a great coach. Now we don't have the great quarterback. That's for sure.
Rich Armstrong 53:02
It’s been a long time for chiefs’ fans. That was a 30-year drought for us. So
Bo Burlingham 53:08
Yeah, no, I remember the old chiefs. I don't know, it looks like the bills are the up-and-coming team in the AFC East. Yeah.
Steve Baker 53:18
Bo Burlingham 53:19
Lately, you know, I mentioned that I take these long walks. And what I do in these long walks, is I listen to books, that has been just great. Because I've been able to go through just a lot of books that I've always wanted to read but could never find time to read. So, for example, I, one of the books, I say I read but I actually listened to it was, you know, Team of Teams by Stanley McChrystal, which is a great book and reminded me a lot of SRC. Of course, everything I read, reminds me a lot of SRC. But it was in that he, he talks about how when he was a general in Iraq, he was up against an enemy, which was unlike any enemy that he or the US Army had ever faced before. And what was unique about that enemy was its flexibility, and its ability to sort of disappear and then and then reappear. And he had to sort of develop a whole new way of thinking about dealing with that enemy, and he had to change the entire structure of part of the army under his command. I also read Clayton Christensen's book on The Innovator's Dilemma, which I found fascinating because sort of the amazing idea that's sort of at the core of The Innovator's Dilemma, which Christiansen identified is that the reason that established companies miss out on the great innovations is because they're doing all the right things. They're listening to their customers; they're actually sort of a textbook case of what a company should do. The result is that when something comes out of left field, and they ask their customers, well, what do you think about this? Customers said, no, we don't want that. We want this, we want you to do more of this. And then by the time they wake up to the fact that there's this whole other industry happening, you know, it's too late. I mean, you know, that's how you look at IBM and Apple, or you look at, well, that's another book I read, which was the Walter Isaacson Biography of Steve Jobs. Lately, I've been mainly reading about history, in particular American history. You know, we have all this controversy that was stirred up by the 1619 project, that the New York Times promoted about how slavery is the central is the sort of core of American history. And although there's a lot, a lot of that whole study that they produced has been demonstrated to be wrong and factually wrong, and so forth. I was very curious. I said, well okay, well, I want to find out. So, I did, there are three books on the American Revolution by a fellow named Nathaniel Philbrick, which are very good. The first one is really built around the start of the war, Bunker Hill and Lexington and Concord and so forth. The second is about the middle of the war, which is built around really Benedict Arnold. And the third is about the end of the war, which is Yorktown. Well, I from that I wanted to read more about Washington. So, I read Ron Chernow. Ron Chernow is the is the historian who wrote the biography of Hamilton, that became the basis of the, you know, the, the musical Hamilton. But he also wrote a biography of Washington, which was very, very interesting. And he wrote a biography of Grant, General Grant Ulysses S. Grant, which was also fascinating. And then I read Eric Foner's book called The Fiery Trial, which was about Lincoln's the evolution of Lincoln's thinking about African Americans and about slavery, and how he grew. I mean, Grant also grew tremendously. And, you know, so I'm going to continue on that task for a while, I guess I've really gotten very, very interested in sort of knowing what's the truth here? You know, what's going on?
Rich Armstrong 59:02
That's been your career, Bo. You've always tried to get to the truth.
Steve Baker 59:05
Bo Burlingham 59:06
Is true. That is true. Somebody once told me, I was talking to John about an article I was writing. And I said, well, I don't know. Is it true? And he said, he looked at me, he said, you care a lot about that, don't you whether or not it's true. And he said, Yeah, I do care a lot about don't all journalists care about it, I guess not.
Rich Armstrong 59:32
What so, not the true.
Steve Baker 59:34
That's right. I wrote down some takeaways and just see if you if I captured some of the big thoughts here, guys. They're not in the order that we talked about them in but I'm seeing a pattern.
Bo Burlingham 59:44
Steve Baker 59:45
that I wanted to share with everybody. 75% of the population thinks profit is evil. And capitalism is a blessing. It's the mechanism for people to uplift themselves and improve their society, socialism does the opposite. The third one is that business has an obligation to teach employees about capitalism. And then, Bo just about you in general, but it's good advice for everybody listening. Always be curious. Always be learning. seek the truth. Those are my takeaways.
Rich Armstrong 1:00:20
Bo Burlingham 1:00:21
That's good. Don't hold me to the 75% number.
Steve Baker 1:00:27
I think it's 95. It's okay.
Bo Burlingham 1:00:30
I have to check with Doug about what is in fact that number, it might be something like 69%.
Rich Armstrong 1:00:38
I think we have that Bo, because we have that online financial course that we developed, and I think we have that number Steve. So, we can get that right.
Bo Burlingham 1:00:49
Steve Baker 1:00:50
We know it's a majority, that's for sure. And it's only going to get worse with the.
Rich Armstrong 1:00:57
Steve Baker 1:00:57
The way that kids get their information these days. It's very easy to sway them.
Bo Burlingham 1:01:01
Steve Baker 1:01:02
Well, Bo, always a pleasure. Rich, thank you for being here as well. Let's keep the conversation going. Be sure to send us your questions, your stories, your best practices, your ideas, your challenges, and your victories. Remember that you are not alone. We will get through this together. And check out all the resources that are available for you at greatgame.com That is capitalism at its best. Thanks for joining us, and we'll see you next time.
The change the game podcast is produced by the Great Game of Business. To learn more, visit greatgame.com.