Each year, as summer fades to autumn, the cry goes up around our hallways to "Free the INC. 500!" All playfulness aside, the task of liberating the 500 growth leaders from a pack of several thousand competitors is the single most labor-intensive project we undertake each year. Beginning in May, there are forms to be mailed out, applications to be processed, information to be verified, numbers to be crunched, writing and artwork to be assigned. Once the list and the feature package are assembled, all the factual material must be rechecked. If you own or manage one of the companies on our list, you know how persistent we can be.
If your company is on the list you have probably also had at least one phone conversation with Elyse Friedman, our senior research editor, who has overall responsibility -- with researcher/reporter Donna Fenn -- for putting the roster together. Elyse, a onetime linguistics major (Greek, Hebrew, and Chinese) at the University of Rochester, earned a degree in library science from Simmons College and worked for 10 years as a research librarian before joining us in 1979. At its outset, INC.'s list of America's fastest-growing private companies numbered 100, and all computations were done by hand. In 1982, the list was expanded by a factor of five; in '83, Elyse wheeled in a microcomputer. This year she made further revisions on the basic application form (more space for specific business descriptions, additional information on chief executive officers, auditor's signature, and the like), hoping, as she says, to "get the list perfect, or at least as perfect as we can make it."
All of which suggests that a more accurate battle cry might be, "Free Elyse Friedman!" "I have nightmares about the 500 for about two months," she admits. "Sometimes I dream that I've entered an extra zero in a company's sales figures, or that a company has misreported its fiscal year and we haven't caught it. Then, too, the definition of 'independent' can get interpreted in 500 different ways, depending on how an entrepreneur has structured his or her business. Considering the attention the list gets, my anxiety is probably natural."
Considering the demands on her time, it is a wonder more companies don't fall through the cracks completely. Elyse's oldest son, Benjamin, 14, plays in a hockey league whose preferred practice time is 7 o'clock Saturday morning. Gabriel, 10, likes soccer and Little League and Mom on the sidelines, not necessarily in that order. Husband Sandy, meanwhile, is a marketing manager for Analogic Corp., in Wakefield, Mass. He lifts weights with Elyse and tries to listen sympathetically when she wakes up in the middle of the might thinking that she has multiplied some paint manufacturer's revenues by a couple of thousand.
The result of all this is that Elyse has become almost as much our library as our librarian. For any staff member with a dim memory of some company once mentioned and long since forgotten, she is the reference file of first resort. Some day, in fact, we may ask her to conduct her own seminar in managing growth companies, based on a working knowledge of more small companies than Colonel Sanders has chicken wings. We could put the job out for bids, but who else would we find who could do it in Chinese?
As INC.'s survey of growth companies has broadened, so has the INC. 500's public profile and sense of purpose expanded beyond the immediate context of our December issue. Two years ago, John Y. Brown, then the governor of Kentucky, invited all 500 CEOs to a two-day work session in Louisville called "A Celebration of the Entrepreneurial Spirit." Last year his Texas counterpart, Mark White, hosted a similar affair -- including workshops on capital strategy and human resource management -- in Houston for company executives a INC. editorial staff. A third such retreat is planned for California next spring. The specific educational value of these sessions aside, even more important has been the opportunity for a group of businesspeople from unrelated industries to meet one another and compare notes on common problems. And what, beyond company growth, do these CEOs most readily share? The short answer is: a relentless curiosity about their own businesses.
We saw this time and again in Houston. At a workshop on mergers and acquisitions, the discussion was suddenly enlivened by a CEO who stood up and confessed he had never thought about selling his company "unit I got a call out of the blue and was asked to name a dollar figure. I had no idea what to say -- what would you say if someone asked you to put a price tag on your own family? -- so I threw out a fantasy figure of $25 million, which seemed almost absurd. . . . Later, I got a check for the full amount." With that, of course, the room was suddenly abuzz with questions. What kind of business? How profitable had it been? Who bought it? How did it feel to run the company after being acquired? Would a $50-million answer have produced the same result? And so on.
Yes, the numbers are dazzling. And yes, every year it gets harder to hit the growth rate that defines in INC. 500 company. But these companies are not defined by numbers alone. They are better defined by an outlook, a sense of vision, a growing knowledge curve as well as a sales curve. Appreciate the numbers, but don't stop there. We didn't. And neither have the INC. 500 companies.