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.

The 4 types of thinking talents: Analytic, procedural, relational and innovative

Understanding thinking talents in yourself and others can build strong teams and help avoid burnout.

Big Think Edge
  • Learn to collaborate within a team and identify "thinking talent" surpluses – and shortages.
  • Angie McArthur teaches intelligent collaboration for Big Think Edge.
  • Subscribe to Big Think Edge before we launch on March 30 to get 20% off monthly and annual memberships.
Keep reading Show less

Brazilian scientists produce mini-brains with eyes

Using a new process, a mini-brain develops retinal cells.

Surprising Science
  • Mini-brains, or "neural organoids," are at the cutting edge of medical research.
  • This is the first one that's started developing eyes.
  • Stem cells are key to the growing of organoids of various body parts.
Keep reading Show less

Do you have a self-actualized personality? Maslow revisited

Rediscovering the principles of self-actualisation might be just the tonic that the modern world is crying out for.

Personal Growth

Abraham Maslow was the 20th-century American psychologist best-known for explaining motivation through his hierarchy of needs, which he represented in a pyramid. At the base, our physiological needs include food, water, warmth and rest.

Keep reading Show less