By Michael Gunther

Is too much growth a bad thing for a business? Growth is necessary for every business, but growth for the sake of growth or to reach some lofty goal can be damaging to an organization that isn’t prepared to handle it. Remember: it wasn’t the hare that won the race against the turtle. Sometimes a slow and steady approach to growth allows for a more lasting, sustainable and profitable business.

I realize we live in a world where public companies are continuously judged on their ability to achieve short-term quarter over quarter growth. This short-term focus on growth often leads to poor decisions for the sake of interim number achievement. Instead, leaders should be making decisions that provide long-term, healthy progress. It’s not uncommon to see headlines about organizations cutting corners or laying people off in order to meet the quarterly expectations of their investors or Wall Street.

This singular focus on growth and profit can actually have a negative impact on the culture and engagement of employees, which in turn ensures that the growth will not be sustainable. Now, you absolutely should have growth goals and profit projections to meet; however, these goals should not be made solely to demonstrate that you are growing. I have seen organizations experience quick growth, which their operations were not able to handle. In turn, their product or service delivery suffered which then made it harder for them to bring in new business.

Every business has to grow just to keep up with rising costs, salaries, new product/service development, etc. I think the smartest organizations are those that realize all growth requires a strong foundation to support it. Without that foundation, the business and the growth will crumble downward. Imagine having your team focused on growth and building the foundation equally. Also, imagine making the tough decision to say no to new clients in order for you to prop up your organization to actually handle the commitments you have already made.

For entrepreneurs, I think this is actually a hard concept to understand. As you start your business, you are trying to grab every client, expand your revenue, hire your team and grow your business. The thought of saying no to business is actually inconceivable. These entrepreneurs may have experienced fast growth early on in their venture so they expect to continue to handle their expansion at the same pace. These entrepreneurs are so focused on driving the growth of their business that they lose sight of the challenges and complexities that come with a larger organization. They will also see issues with communication; solving problems takes longer and the quick resolutions they are used to become ever so challenging with a larger and diverse team.

Without changing from this entrepreneurial mindset of ‘growth at all cost,’ these businesses often see a fast rise to the top and a fast decline to the bottom. Building a solid business takes time, there are no short cuts and it is the steady, managed growth organizations that typically win the race.

 

Bottom Line

As a leader or entrepreneur how are you focusing on growth? I personally prefer solid, large goals to reach for, but I also understand that slowing down to fine-tune operations can allow for faster growth in the future.

 

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