Exploring the challenges of pursuing growth at all costs, the podcast discusses the importance of setting realistic growth targets and strategic planning. It examines the downfall of organizations trying to grow too fast, with examples of companies getting the balance right. The focus is on sustainable growth strategies that align with market demand and organizational capabilities.
It's crucial for leaders to strategically consider the direction and method of growth, not just the rate.
Balancing growth ambitions with organizational capacity is vital to achieving sustainable growth.
Deep dives
Gary Bizano's Study on Business Growth
Gary Bizano, a Harvard Business School professor, conducted a study on the growth performance of nearly 11,000 public US companies. He discovered that most companies struggle to sustain growth, with three quarters showing minimal to no growth after adjusting for inflation. Bizano emphasizes that setting growth targets requires careful consideration of market demand and organizational capacity to achieve sustainable growth.
Common Mistakes in Sustaining Growth
Organizations often make the mistake of outgrowing their resources, leading to strains on capabilities like staffing and finances. Bizano warns against hastily expanding without ensuring the necessary resources are in place, as this can result in poorly designed processes and cost structures. He highlights the importance of balancing growth ambitions with the organization's ability to meet demand effectively.
Components of a Growth Strategy
Bizano outlines a growth strategy composed of three key elements: growth rate, direction, and method. He stresses the need for companies to evaluate these components in conjunction, considering trade-offs and ensuring alignment with strategic goals. By focusing on building capabilities and making strategic resource investments, organizations can achieve sustainable and profitable growth over time.
Many companies, especially in the tech world, have come to embrace the idea of growth at all costs. But according to research from Gary Pisano, professor at Harvard Business School, most firms fail to consistently increase revenues and profits over the long term, adjusting for inflation. He says that it’s important for leaders to think more strategically about not just the rate of growth they want to achieve but the direction they want to grow in and their method for doing so. Trying to grow too fast can be the downfall of many organizations. He shares examples of companies that have fallen into this trap, as well as those getting the balance right. Pisano wrote the HBR article "How Fast Should Your Company Really Grow?"
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode