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Life Health > Running Your Business

The ‘Grow or Die’ Lie

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As a small business owner, you’ve no doubt heard the axioms regarding business growth. “Grow or die,” “Any growth is good growth,” etc. These are the mantras of Wall Street and most business schools and consultants today. However, a new book by business school professor Ed Hess entitled Grow to Greatness: Smart Growth for Entrepreneurial Businesses questions this widely held belief.

“At best those beliefs are half-truths and at worst they’re pure fiction,” says Hess. “Growth can be good and growth can be bad. Bigger can be good and bigger can be bad. When not approached carefully, growth can destroy value as it outstrips a company’s managerial capacity, processes, quality and financial controls, or substantially dilutes customer value propositions.”

Drawing on the examples of 12 real-life entrepreneurs, Grow to Greatness sets forth a blueprint for approaching business development and managing its risks and pace. Through the examples of such companies as Starbucks and Toyota, the reader gains valuable insight into managing growth and addressing the day-to-day challenges of growing a business.

After conducting an in-depth study of 54 high-growth companies, Hess discovered that, in many cases, the entrepreneurs of these companies had come from situations in which unmitigated growth had proven costly. These entrepreneurs had inadvertently destroyed their first ventures by taking on too much growth too quickly. With a hard-won respect for the destructive potential of growth, these veterans of the business world had learned to pace the growth of their subsequent businesses.

“That is what I call the ‘gas pedal’ approach to managing growth,” notes Hess. “Let up on the growth gas pedal as needed to give your people, processes and controls time to catch up. Instead of grow or die, be motivated by this motto: ‘Improve or die,’ ” he advises. “Every business must continually improve its customer value proposition better than its competition in order to stay viable. That’s where real success lies.”

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