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Discovering Evergreen

Discovering Evergreen

As most of you are aware, Dave Whorton and I have written a book about Evergreen® businesses—or rather, more precisely, about Dave’s discovery of the Evergreen way of building and running a company. Until then, the Evergreen companies had been completely unrecognized as a business phenomenon, not to mention a critical component of the American economy.

I had been introduced to Dave by his erstwhile partner Chis Alden, who had approached me about attending the second Tugboat Institute® Summit in 2014. I was the co-founder of the Small Giants Community, based on my book titled Small Giants: Companies That Choose to Be Great Instead of Big. Alden thought some members of the community might be interested in attending the conference. I couldn’t make it, but I was fascinated by the concept, especially given its unlikely origin in Silicon Valley, the last place you’d expect to find any interest in private companies that eschewed venture capital and never intended to be sold. I resolved to find out more and possibly write about it for Inc. magazine, where I was editor-at-large at the time.

Toward that end, I introduced myself to Dave and met him at his office in Palo Alto in mid-December 2014. We chatted about the Evergreen companies in his institute. They sounded a lot like some of those I had met through Inc., including one in particular, SRC Holdings—formerly Springfield Remanufacturing Corp.—of Springfield, Missouri, with whose co-founder and CEO, Jack Stack, I had written two books. During the meeting, I suggested that Dave read the first of those books, The Great Game of Business. A couple of weeks later I was surprised to learn that not only had he read the book right after our interview but he’d arranged to visit Stack in Springfield.

I continued to do research for an article. Among other things, I attended the next Tugboat Institute Summit in Sun Valley, Idaho. I had recently published another book, this one titled Finish Big: How Great Entrepreneurs Exit Their Companies on Top and, at Dave’s invitation, had agreed to give a brief talk about it. The experience at Summit gave me a better sense of the organization he was building and the business leaders he was attracting. I was most struck by their determination to build companies that would last much longer than they themselves would be around to participate. I decided to make the companies’ longevity the focus of my article for Inc.

My editors loved the idea, and I thought they would make it the cover story, but—as the publication date approached—I was told that the magazine had a big “scoop” that it would have to give priority on the cover instead.

The “scoop” turned out to be what my editor described as an “exclusive” interview with Elizabeth Holmes, the founder and CEO of Theranos, manufacturer of a supposedly revolutionary new blood testing system. Sure enough, the October 2015 issue appeared with Elizabeth Holmes on the cover portrayed as “The Next Steve Jobs.” Also mentioned was my story about building companies that would last 100 years or more. Two weeks later, the Wall Street Journal published the first of John Carreyrou’s exposés about Elizabeth Holmes and the Theranos fraud, for which she was ultimately convicted and sent to prison. My article about Tugboat held up considerably better.

Thereafter I continued to follow Dave Whorton and Tugboat Institute, attending Tugboat Institute Summit every year. I was very impressed by the company leaders whom I met there—the lengths that they went to support their people, the role that they played in their communities, their attention to the quality of the products and services they offered their customers. I included several of their companies in the monthly column I was then writing for Forbes.

It occurred to me that many more people would like to hear the story of Tugboat Institute and how a former venture capitalist wound up starting it. I had been writing about business for almost 40 years, and I had never heard or seen any article or business school course about companies that followed the Evergreen 7Ps® principles (Purpose, Perseverance, People First, Private, Profit, Paced Growth, and Pragmatic Innovation) that Dave had identified as the defining characteristics of Evergreen companies. I could see they constituted an important part of the economy that had heretofore completely escaped the notice of the wider business world. When Dave happened to mention that people had suggested he write about the subject, I jumped at the chance to volunteer my services. And that’s how this book came to be written.

We did it with long interviews that I arranged to have transcribed. Then I worked with the transcriptions to produce a draft that Dave would change as he saw fit. What interested me most in working on the book was the opportunity it offered to examine two totally different concepts of business—or actually three, if you consider that Kleiner Perkins exposed him to two ways of building companies with venture capital. All of them can produce significant companies. The approach people prefer depends in large part on their values and goals. Dave Whorton thought that the best businesses would do what Bill Hewlett and David Packard had done with their company, Hewlett Packard—that is, build a community that not only makes great products for customers but fosters better lives for the people who do the work required. Dave Whorton’s experience gave me new insights into how it is done and specifically how the Evergreen companies go about it, which is the subject of the book.

My hope is that readers will appreciate the role of those companies play not only in shaping our economy but in enriching our world. I also hope that readers who start their own businesses will see the Evergreen model as one worth pursuing themselves.

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