You’re chasing too much. You don’t know what’s the oxygen of your business or what’s the blood.
Going from the fast track at U.S. Steel to creating the Bonsai Business Model is a journey that gave J. Scott Scherer plenty of opportunity to discover what’s important and meaningful in running a business. Small Giants Community Executive Director Raul Candeloro interviewed J. Scott to learn more about what inspired him to create the Bonsai Business Model and what it all means for businesses around the globe.
Small Giants Community: Let’s begin by talking about yourself, so our readers can get to know you better. Could you briefly describe your life journey until you created the Bonsai Business Model?
J. Scott Scherer: My Hungarian grandfather owned a very successful home furnishing business in Pittsburgh, PA where I grew up. Gramps was quite a philosopher, and he loved Spinoza and the notion of an ordered world. We spent hours together under the awning on his front porch, him reflecting on business and life and me soaking it all in. Gramps adored trees. They were metaphors for him. So the seeds of this bonsai business philosophy were planted in me by my grandfather, then blossomed through reflection on my later work experience.
J. Scott Scherer, Creator of The Bonsai Business Model
I understand the need for scale in some businesses, and that scale serves certain purposes. But often, size can create dysfunction. I got curious about what drives businesses to be bigger, and why we even use size as a descriptor when we talk about business: we have Big Business, and Small Business Administration. The use of size in the descriptor became a clue to me that something underneath was driving the word choices. Not that size is bad, as a business owner I just never saw size as a goal. Growth, yes. I began to sense the need for proportion in growing a business, and proportion is a key tenet of the bonsai business model.Leaving lots of stops along the way, eventually I started a business which is entering its 23rd year and running strong. Meantime, I completed my coaching studies at New Ventures West and my Masters at the Drucker School of Management. A devotee of Drucker, I believe business – like any organization – serves a larger public good. As a business owner, I noticed that as our business got bigger it changed. I experienced what I call the social diseconomies of size. Depersonalization crept in.
So this question of business and size and purpose and proportion all caught my attention early on in life and that gave birth later to the bonsai business philosophy.
Small Giants Community: Now about the concept. With already so many business and management theories out there about, what new information does the Bonsai Business Model (BBM) offer?
Scherer: The Bonsai model is at root a philosophy of business told through the metaphor of Bonsai plants. Raising bonsai is unique because it is a horticultural art form – an art form with a living being. Growing a business is a social art form, a generative act of creating and sustaining an organization that serves society. Shape is more important than size in bonsai. In business, who you are and how you contribute is more important than how big you or your profits are.
BBM seeks to get to the ‘why’ and ‘how’ of business The essential tenets of the bonsai model are:
1). Business is alive. 2) Shape trumps size. 3) Caring fosters growth. 4) Harmony over hegemony. 5) Grounded in identity. 6) Destined for beauty.
The model at base provides a reflective framework for discerning why a business does what it does, and how it goes about doing its work. BBM asks: What makes us unique? What is our contribution to the world? How do we genuinely care for our customers? There’s an intimacy in the model, in the connection between the business and the customer, an intimacy implied by a bonsai owner caring for the unique needs of its plant, as no two bonsai’s are alike. They wreak uniqueness.
The Bonsai model carries an element of human and social concern, prompting business to take seriously its social role in the world. As such, the model assumes that a business consciously participates in a larger purpose, and weighs the effects of its actions on the whole. In this sense, BBM fits within the whole conscious capitalism movement.
Small Giants Community: Could you give us an example out of the Bonsai Business Model that reflects your main ideas or concepts?
Scherer: Sure. Growth has been equated to getting bigger, and that is not true. I’ve owned a business for 20+ years, and we have maintained a relatively steady range of annual revenue, but we have never stopped growing. We grow in depth. We grow in understanding. We grow in the excellent quality we deliver to our clients lives. And we’ve grown our margins, without necessarily growing in size.
Small Giants Community: In a short sentence, what kind of person should be attracted to your ideas? What kind of advice should they be looking for ? Or what kind of problem should they be looking to solve?
Scherer: People who weigh meaning before they weigh money. How do I construct a business that delivers my unique contribution to the world, and sustains my meaningful living? The problem they’d be looking to solve is a deeper question: How do I meaningfully contribute to the well-being of the world in a way that sustains and fulfills me?
My grandfather often told the story of the three guys laying brick, each asked successively what they were doing, and issuing three separate replies. One guy was laying brick, another building a wall, and the third, a cathedral. Important we see and experience the social contribution of our work.
You ask ‘what problem would they be looking to solve?’ The problem they would be looking to solve is a lack of excitement and commitment in the workplace, brought on by a lack of deeper vision and deeper connection to purpose.
Small Giants Community: What’s the first thing you would like a reader to do after understanding the Bonsai Business Model?
Scherer: This is a very Drucker question. Drucker wanted to know what you’d do on Monday morning after the insights of the weekend retreat. So I appreciate this question.
I would like them to reflect on their business to discern whether they feel drawn to their work, or driven by their work. Are you pushed or pulled by your work? Does your work derive from your essence? If not, change the business you are in. Your business needs to grow out of your core identity. This is where your greatest contribution lies.
Small Giants Community: What other books would you recommend for someone that wants more information about this?
Scherer: In Drucker, I recommend his early work, END OF ECONOMIC MAN, and later, his ECOLOGICAL VISION which provides a survey of his work. Drucker described himself as a social ecologist and the Bonsai Business Model views business as a living member of a broader social ecology. Another book I like is THE POVERTY OF AFFLUENCE by Paul Wachtel, which addresses the poverty of materialism.
About your work as a consultant…
Small Giants Community: What is the biggest mistake you see small business owners making in the areas covered by your theories?
Scherer: Not keeping score in the right ways. One of the reasons we grow toward size is that we measure profits to the exclusion of other factors such as how humanely we treat employees, how well do we listen to our customers, how excellent are we at what we do? The Taoists have taught us that energy follows attention. Do we pay attention to how finely our services meet our customer’s needs, and if we should just stop getting bigger if that size creates a disservice to our customers?
I excelled in racquet sports growing up – tennis, table tennis, badminton, racquet ball. Anything with a racquet. I had one goal with each stroke – put the ball or shuttlecock where my opponent could not get to it to make a competitive return. I did not pay attention to the score, I paid attention to my execution. Good execution led to scoring. In business, scoring is customer fulfillment. Profit is a byproduct of meeting a specific commitment we made to the customer. Profit precipitates out of customer fulfillment.
Small Giants Community: What suggestions would you give them to improve? Where should they start?
Scherer: First, I would suggest they take time to reflect on their business. Punctuate your days with scheduled times of reflection. Annie Dillard has that wonderful saying: “How we live our days is how we live our lives.” So take time for reflection.
Then, I would start with the fundamental question: How do you know you are in the right business for you? We need to make sure we are in the right business, otherwise we are swimming at a cross-current to our purpose.
Once you know you are in the right business for you, I suggest some serious conversations in the work place around commitment and contribution, two big words.
We are in the middle of this inquiry now with my company. I started intentional conversations about commitment. What are your personal commitments? What do you care about? Then we moved to: What are our corporate commitments as a company? Approaching these conversations from the human perspective of what you care about and what you are committed to brings the conversation to a deeper level than discussing goals and objectives. Goals and objectives are necessary, but they are above ground, so to speak, and we get to the deeper roots by probing people’s perspectives on commitment and contribution.
From commitment, we move to contribution. What is your unique contribution at work, and how does that serve your personal commitment and our corporate commitments? What is your vision of your contribution to the world?
The third step is to ‘mind the gap’ between commitment and contribution. Where’s the gap between our contribution and our commitment, and how do we close that gap by gaining new competencies – delivered through a custom designed personal and professional development program for each person. So commitment, contribution, and competencies are three lines of inquiry here.
That’s plenty to gnaw on for starters.
Small Giants Community: What about managers and team leaders? In general, what do you think they should STOP doing if they wanted to improve their results?
Scherer: Stop treating people (including yourself) like a machine. Rather treat yourself and others as human beings with faces and lives.
Stop chasing money. Get clear on how much is enough. How much is enough business for you? My dad, a coach and educator by profession, offered me great advice when I was in my early 40’s and working like a dog. He said it this way: “Son, pick your number (he was referring to income). Pick the number you need to live a full life. And hold there. Money is a means, not an end.”
Stop worrying. Check to see if you are operating out of mindset of scarcity and threat or out of a mindset of abundance and possibility. That makes all the difference.
Mind you, these are three reminders I issue daily to myself, too, as a practice. It’s a way of being. Some days I fall short. So then I practice more.
Small Giants Community: Anything they should start doing more?
Scherer: Have meaningful conversations at work. Circle back to talk with your people “why we do what we do.” Money is cheap bait to get people to do tricks at work. The harder but more sustaining motivation is planted deeper in the person. Every time I engage in these conversations with people in my company, their commitment deepens, and more of them shows up at work the next day.
Small Giants Community: After all the research you did for the Bonsai Business Model and based on all your experience in this area, what kind advice you see out there that you disagree with or think that is misleading?
Scherer: I’ll tell a little story. I started my specialty tour business with two partners who were 30 years senior to me – they were the equity, and I was the sweat. We started in 1991, and I bought them out in ’96, and that was first year I had a real look at the books. My accountant came in one day and showed me how much money we’d made that year. I was shocked. I had focused so acutely on serving our customers, I never paid attention to how much profit we were making. Sure, I’d I kept an eye on our profit margins and costs and market share and all that good stuff, but had not focused on profit. Rather I focused on service and keeping our promises we’d made. Like playing racquet sports, I focused on placement.
So my advice is counter-intuitive, but I’ve found that to make money, don’t focus too much on making money. Business is not about making money. Money – profit – it has been said, is oxygen for a business, it keeps it alive. OK, well if we stick with that metaphor, I maintain meaning is the blood of a healthy business, and without the blood that oxygen goes nowhere!
Money and meaning are like two legs we stand on, but which do we lead with as we move through life?
Or to change metaphors and borrow from Robert Frost’s poem, TWO MEN IN MUD TIME, about the images of vocation and avocation blending seamlessly. For a business maybe money and meaning are the two perspectives which combine seamlessly into a whole. My question then for your business is: which is your dominant eye?
For a long time, if you wanted to do meaningful work, people looked to the social sector or the non-profit sector, and that to me was a signal that the way we did business was somehow not serving people at a deeper human level. I believe we can build meaning by staying in the business world. We just need to view business differently.
Small Giants Community: What are the VALUES that your company lives and dies by? Why is this so important to you?
Scherer: First and foremost, trust. Trust is the ‘between’ and the context of any relationship. Without it, relationships suffocate. Trust is oxygen for relationships.
Second, humility, in the sense that we don’t see ourselves as the center of the universe. We operate within a community, a society, and we are fair – to ourselves, to our customers, and to our suppliers.
Third, integrity. We do what we say we are going to do, and often more. When we make commitments, we keep them. This makes us reliable and predictable with our clients and our suppliers.
Four, excellence. We want to meet and anticipate the needs of our customers in ways that make their live fuller, freer, and more fun. Full, free, fun. That is our internal motto.
Small Giants Community: Any additional comments or thoughts for our readers?
Scherer: Your business, your work - is a manifestation of your commitments and your contribution in this life, and it is a manifestation that we each create. Have fun with it. Make the world better by your business having been on the planet.
Want to get hold of J. Scott? You can reach him at the following places:
- Website: www.bonsaibusinessmodel.com, CoreWorksConsulting.com
- E-mail: To keep him from getting spammed via bots scanning the web, send us a message and well share J. Scott’s email address.
