Tom Peters Company has an interview with Bo Burlingham editor at large at Inc. magazine about his new book “Small Giants – Companies That Choose To Be Great Instead of Big”.
The book focuses on an issue which has long exercised my mind, whether or not growth should be the driving force for a business. For a blog focused on innovation as a source of growth it’s a question that raises many interesting issues.
There’s no doubt that growth is the holy grail of most companies and the core driver of value from Wall Street’s perspective. But as many companies such as McDonalds and Coke have realised, there are limits to growth – and many smaller businesses and brands have lost their attraction when they’ve hit the mainstream. It’s clear for some businesses that growth can dilute the value proposition or cause a weakening in the companies ability to stay close to its customers.
My perspective on this issue is that it depends on how you define growth. Many will focus on growth from a financial or numbers perspective – growing revenues, adding customers, opening more locations etc. My interpretation is to take an all round stakeholder perspective on growth – i.e. is the brand growing in the eyes of your customers, are your products and services growing in value to your customers, are management and employees growing from the challenges and opportunities of working for a company that delivers great products and services, is the business making a growing contribution to the communities in which it operates? As “Small Giants” appears to tell, these are the factors driving these businesses – and while they may not be generating growth from a size perspective many of them are remarkably profitable.
This choice of defining growth may not be one that public companies have much choice over, but for private companies and partnerships I think entrepreneurs, managers and employees should be asking what growth means for their business and whether size is the right or goal or possibly the enemy of long term success.
What do you think? Is your business grappling with this issue? Have you seen businesses lose their way by the singular pursuit of scale?
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