Everything You Know About Growing Your Business Is Wrong
Edward Hess: Our view of growth, what I call the US growth mental model has really grown up over the last 50 years in this country coming after World War II and a period of great productivity, great growth, rising living standards, and the United States becoming really the dominant economy in the world. All of that plus our cultural history of entrepreneurialism, individualism has fueled a group of beliefs about growth in our society.
Those beliefs are all growth is good, bigger is always better, businesses must grow or die, and in the public markets, public companies must grow continuously in a linear fashion with ever-increasing quarterly returns. Unfortunately, those four beliefs are not based in any science, any empirical data or business reality. They are at best half truths and some are pure fiction.
1. Growth Can Stress a Business:
Too much growth can be bad. In order to grow a small business it takes more people, more processes, more controls. Growth has to be managed. Growth has to be paced. You need processes for growth. You need controls for growth. You need people for growth, and growing a small business is managing all of that so you don’t lose control of the business.
2. Bigger Is Not Always Better:
Bigger is not always better. The bigger an entity the more complex it is to manage. The bigger you become, it puts you into different competitive spaces, and therefore you have bigger and better competition.
3. Improve or Die (or How to Outrun the Bear)
To stay in business you don’t have to grow. What you have to do is constantly improve your customer value proposition better than the competition. Business is no different than basically that old joke about the two guys walking in the woods who come across the bear and one guy looks at the other guy and says, “We got to outrun the bear.” And the other guy says, “No, we don’t.” “I just have to outrun you.” That is business. You just have to out compete the competition and deliver more value and continuously improve to the customer.
4. Growth Is Not a Continuous Linear Function
Companies that grow in a continuous manner for four years or more are rare, are the exception. The longer the term, if you go out 7 years or 10 years it is very rare. Growth is not a continuous, linear, mechanistic, deterministic function, and so the research shows that what we believe about growth is basically completely wrong.
Directed / Produced by
Jonathan Fowler & Elizabeth Rodd
The conventional wisdom that all growth is good is not based on real science, empirical data, or business reality.
Swipe right to make the connections that could change your career.
Swipe right. Match. Meet over coffee or set up a call.
No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.
A NASA astronomer explains how astronauts dispose of their, uh, dark matter.
- When nature calls in micro-gravity, astronauts must answer. Space agencies have developed suction-based toilets – with a camera built in to ensure all the waste is contained before "flushing".
- Yes, there have been floaters in space. The early days of space exploration were a learning curve!
- Amazingly, you don't need gravity to digest food. Peristalsis, the process by which your throat and intestines squeeze themselves, actually moves food and water through your digestive system without gravity at all.
The Harvard psychologist loves reading authors' rules for writing. Here are his own.
- Steven Pinker is many things: linguist, psychologist, optimist, Harvard professor, and author.
- When it comes to writing, he's a student and a teacher.
- Here's are his 13 rules for writing better, more simply, and more clearly.
A growing body of research shows promising signs that the keto diet might be able to improve mental health.
- The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
- Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
- Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.