Jason Jennings

What does every company, private or public, American or otherwise, have in common? Each is deeply concerned with how to grow its business successfully.

Before making a speech, I like to meet with at least 10 people who will be in the audience and ask them, “What do you hope to achieve in your business, and what roadblocks do you find?” Every response has a common thread: Business owners are challenged with finding ways to increase revenue and profits. Every business owner must find ways to grow to survive. Seemingly, it’s the most elementary concept. Why is it then that of the approximately 11,000 publicly traded companies in the United States, fewer than 120 have had double-digit growth in revenue for 10 consecutive years?

For my book Think Big, Act Small, my researchers and I identified the nine most consistently successful companies in the United States, which surprisingly remain under the public radar. We dove right into the heart of their businesses to see what they’re doing differently than the rest.

Each of these companies—Cabela’s in Sidney, Nebraska; Dot Foods in Mount Sterling, Illinois; Koch Industries in Wichita, Kansas; Medline Industries in Mundelein, Illinois; O’Reilly Automotive in Springfield, Missouri; PETCO Animal Supplies in San Diego; SAS Institute in Cary, North Carolina; Sonic Drive-In in Oklahoma City; and Strayer Education in Arlington, Virginia—has seen double-digit growth in both revenue and profits for 10 consecutive years, and has done so without significant mergers or acquisitions.

But as a theologian friend of mine has said, “Any time you see a conclusion, turn it upside down and an even greater truth is revealed.” So that’s what we did. Seemingly what this told us was that some 10,991 companies have never figured out how to create sufficient demand for their business as to be in charge of their financial destinies.

What are these nine companies doing differently than everyone else? A lot, it turns out, but probably not what you’d expect. My researchers and I found that these companies all think big, but act small and base their businesses on 10 building blocks: Remain down to earth, get your hands dirty, make short-term goals and long-term horizons, let go, have everyone think and act like an owner, invent new businesses, create win-win solutions, choose your competitors, build communities and grow future leaders.

Each of these building blocks is important and applicable to all businesses. But in its current climate of increased consolidation and global competition, the metals industry should pay particular attention to four of them.

Keep Your Hands Dirty
There’s a prevalent view in business that top executives shouldn’t be burdened with having to deal with customers. People begin their careers doing the dirty work and interacting directly with customers, but the higher they move up, the less they have to deal with them.

One of the most valued lessons a business owner can learn is that the people who lead the most successful companies spend half of their time with customers. All the way up to the CEO, everyone must be involved in the dirty work of the business.

Jim Cabela, cochairman of Cabela’s, one of the companies featured in Think Big, Act Small, takes this notion to the extreme. Every morning, he sorts through a stack of customer comments and complaints, and directs each one to the appropriate employee for immediate follow-up. Cabela refers to his company’s employees as partners and continually keeps his hands dirty. Because of this hands-on philosophy, Cabela’s has enjoyed 25 years of consistent growth.

Let Go
The reality of the metals industry is that approximately 40 major steel companies filed for bankruptcy over the past six or seven years. When I talk to people about why this occurred, they cite legacy costs, union contracts negotiated 30 or 40 years ago and foreign competitors. How then has the industry’s own Nucor Corp. been able to pay 134 consecutive quarterly dividends, pay its average worker $100,000 and refrain from layoffs, all while its competitors were going bankrupt?

Many companies were unable to survive because they failed to let go of yesterday’s breadwinners, ego and the “same old, same old.” General Motors poured nearly $500 billion into advertising with its disastrous “It’s Not Your Father’s Oldsmobile” campaign to resurrect the dying line. GM simply wouldn’t give up its legacy. But the campaign fooled no one. Younger demographics found the campaign laughable, while older demographics found it offensive. Oldsmobile closed its doors the following year.

The top nine companies in Think Big, Act Small have mastered the art of abandoning products, services and processes whose time is past. Some give problem children a second chance, while others immediately find new ways of doing things. But all quickly get on with the business at hand: growing revenue.

Everyone Thinks Like an Owner
The companies in Think Big, Act Small have been successful at empowering employees and creating an enterprise where everyone thinks and acts like an entrepreneur. They do this by rewarding workers for their thirst for knowledge, developing a common set of rules for all employees and urging workers to ask whether everything they do creates value in the mind of the customer.

Owners are compensated for the value they create; employees should be no different. At Koch Industries—a conglomerate with holdings in petroleum, natural gas, chemicals, fibers, minerals, ranching and securities—it’s not unheard of for a worker with a $70,000 base salary to earn an additional $100,000 to $200,000 in bonuses.

In the metals industry, Nucor operates under a performance-related pay structure that rewards goal- oriented teams of employees with incentives related to meeting specific goals and targets. When executives invite employees to think like owners, they must also pay employees like owners and establish paychecks based on how much work is accomplished. Nucor has mastered that for 30 years.

Grow Future Leaders
The metals industry is facing an upcoming crisis: It hasn’t grown future leaders for many years. Metals companies stopped hiring in the late ’80s and early ’90s. Today, workers are either 60-plus on their way out the door or are coming in brand new. The metals world is missing a swath of leaders in their 40s who have matured in this industry.

The companies in Think Big, Act Small haven’t hired outside CEOs to tinker around with their culture. They haven’t brought in high-profile cost-cutters to artificially inflate performance. Instead, they’ve relied on homegrown leadership to increase revenue. They do this by investing in training, putting future leaders in direct contact with customers, and constantly increasing responsibility and encouraging risk-taking.

Is it too late for the metals industry to embrace this way of doing business? It’s never too late for change.

The problem is, historically, companies embrace change only when an enlightened CEO takes over or when they’re driven to the edge of the cliff. But without resources, it’s tough to see a change through to completion.

One Sunday, leaving church in San Francisco, my family and I decided to visit Fisherman’s Wharf, which we hadn’t seen in years. We gawked just like tourists as we walked from site to site. I saw the most amusing thing—a hefty Midwestern man wearing a T-shirt that read, “Change is great. You go first.”

When change comes knocking on the door, it’s easy to say, “Not today.” In terms of implementing change, many companies stray. But right now, certain factors in the metals industry have fundamentally changed and much more cash is on hand. For metals executives, there is no better time for a change.

Jason Jennings is the author of three international best-sellers, including It’s Not the Big that Eat the Small; It’s the Fast that Eat the Slow. His newest book, Think Big, Act Small, was released in the fall of 2005.