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A good kind of group think builds sustainable small businesses

Ernesto Sirolli taps into the collective genius of communities.

Sirolli says the businesses he’s helped build have an 80 percent success rate.

Photograph: Sirolli Institute

If you happen to ride your bicycle to Ernesto Sirolli's Sacramento, California, residence, as I did, your effort won't go unrewarded. When he opens the garage door, you'll be treated to a glimpse of his prized possession, a white 1951 Morgan Roadster. The Morgan Company, he'll quickly and enthusiastically tell you, is a family-owned business in England founded by H.F.S. Morgan that this year celebrates its 100th anniversary. "They have completely flown in the face of conventional business wisdom!" says Sirolli. "Their cars are all hand-made! Look, the body is made out of wood. And there is a seven-year waiting list for a new one!" It's clear that beyond the typical automobile fetishism, Sirolli is enthralled that a company of that kind could continue to stay small and produce beautiful objects into the 21st century.

It's a great introduction to the lifework of Sirolli himself, who over the last 23 years has helped communities around the world grow small businesses from the ground up. By his reckoning, he and his disciples have aided in the start up, expansion or survival of 30,000 businesses on four continents. At a time when businesses around the world are being rocked by the global economic implosion, Sirolli's methods could help struggling entrepreneurs not just survive but thrive. More than bolstering bottom lines, the Sirolli Institute helps communities help themselves, reinventing local networks and building the social capital that's the foundation of true prosperity. Sirolli fires himself up an espresso on the stove, then we move to his Japanese rock garden living room so he can explain how he accomplishes this.

"Enterprise facilitation" is the name Sirolli has given to what his Institute does. If that phrase makes your eyes glaze over instantly, you're not alone. The modern corporate vagueness, and the little trademark bubble that follows it in print, can be a bit off-putting at first. But in person, Sirolli is skilled enough as a pitchman to get the message across. With his dark, wavy hair and moustache, Sirolli could be the Italian Tom Selleck, although his robust accent and barely controlled enthusiasm have me thinking "Borat" more often than I'd like.

Before he explains his methodology, Sirolli insists I understand the idea at its core: A successful business requires three essential components—product, marketing and financial management—and no single human being is capable of delivering all three with equal passion and competence. "The death of the entrepreneur is solitude," he says. "If you're alone in business, you'll die." This isn't some casual observation, but the core of his faith, what he has come to call "the trinity of management."

On the face of it, this idea doesn't strike one as particularly radical, but it goes against what Sirolli considers a pernicious but enduring myth: To start a successful business, you must be able to handle all three aspects yourself. Not one to shy away from absolutes, Sirolli lets me have it: "Henry Ford, Walt Disney, Bill Gates: None of the greatest companies in America was started by one person! I've done the research. Not even one! It's always two, three, four people."

The other distinguishing principle that guides Sirolli's methodology and permeates every aspect of the enterprise is this: One should never go where one is uninvited. To explain this, he takes me on a tour of his early years as an aid worker in Africa, a part of his story recounted in his 1999 book Ripples from the Zambezi: Passion, Entrepreneurship, and the Rebirth of Local Economies. Sirolli worked for six years with Italian aid agencies in Zambia, Kenya and the Ivory Coast, the results of which, in typically superlative fashion, he qualifies as "disastrous," adding, "We always did it from the top down and it never worked. We had zero respect for people. Everything we touched we killed." In the midst of this rolling disaster, Sirolli got a copy of the 1973 alternative-economy classic by E.F. Schumacher, Small Is Beautiful. There he encountered a few sentences that changed his lifework forever. Sirolli's paraphrase: "‘If people don't wish to be helped, leave them alone.' This should be the first principle of aid."

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