Friday, March 1, 2024

g-f(2)2032 The Myth of Explosive Growth: Why Sustainable Strategies Win in the Long Run

 


genioux Fact post by Fernando Machuca and Bard (Gemini)


Finding Your Growth Sweet Spot: Key Insights from HBR


The Harvard Business Review article, "How Fast Should Your Company Really Grow?", tackles the critical question of optimal growth rate for companies. It challenges the simplistic notion of "growing as fast as possible" and proposes a strategic approach considering various factors.



genioux GK Nugget:


"Sustainable profitable growth is key, and the optimal rate depends on your company's capacity to handle it effectively." — Fernando Machuca and Bard (Gemini)



genioux Foundational Fact: 


This article debunks the myth that faster growth always leads to success. It emphasizes that companies should choose a growth rate that aligns with their capabilities, considering factors like:


  • Profitability: Companies with higher return on equity (ROE) can generally handle faster growth without sacrificing value.
  • Financial resources: Rapid growth often requires significant investments, so ensuring sufficient funding is crucial.
  • Organizational capacity: Scaling up too quickly can strain existing systems and manpower, leading to inefficiencies and potential downfall.



10 genioux Facts:



  1. Most companies experience little to no growth: Analysis shows that most companies don't achieve consistently high growth rates.
  2. Sustained high growth is uncommon: Even companies in the top growth quartile often struggle to maintain it for prolonged periods.
  3. Prioritize profitable growth: Chasing rapid growth at the expense of profitability can ultimately destroy shareholder value.
  4. Align growth with capabilities: Choose a growth rate that your company can handle effectively based on its resources and infrastructure.
  5. Consider funding needs: Ensure you have the financial resources to support your desired growth trajectory.
  6. Evaluate organizational capacity: Assess your systems and manpower to ensure they can handle the demands of rapid expansion.
  7. Don't be afraid of slower growth: Moderate and sustainable growth can be just as valuable as explosive but unsustainable growth.
  8. Learn from others: Analyze successful companies in your industry to understand their growth strategies and challenges.
  9. Adaptability is key: Be prepared to adjust your growth rate as your company and market conditions evolve.
  10. Long-term vision matters: Focus on building a sustainable and profitable business, not just achieving short-term growth targets.




Conclusion:


Companies seeking long-term success should avoid the growth-at-all-costs mentality. They can navigate the path toward sustainable success by carefully considering their capabilities and aligning growth with profitability.



REFERENCE

The g-f GK Article


Gary P. PisanoHow Fast Should Your Company Really Grow?, Harvard Business ReviewFrom the Magazine (March–April 2024).



Gary P. Pisano


Gary P. Pisano is the Harry E. Figgie Jr. Professor of Business Administration at Harvard Business School¹. He has been on the faculty since 1988 and served as Harvard Business School’s Senior Associate Dean for Faculty Promotion and Tenure from 2018 to 2023¹. Pisano's research, teaching, and consulting focus on the management of innovation, strategy, and enterprise growth¹.


He is the author of "Creative Construction: The DNA of Sustained Innovation" (PublicAffairs, 2019), which provides a guidance framework for businesses to respond to digital disruption¹. Pisano has also written extensively about how organizations learn, innovate, and compete⁴.


Before joining Harvard, Pisano worked with General Electric as an electrical engineer and later held positions at consulting firm Booz Allen Hamilton, Ingersoll-Rand PLC, and Metrologic¹. His remarkable research conducted over three decades and his extraordinary on-the-ground experience with big companies and fast-growing ones have provided new thinking about how the scale of bigger companies can be leveraged for advantage in innovation¹.


Source: Conversation with Bing, 3/2/2024

(1) Gary P. Pisano - Faculty & Research - Harvard Business School. https://www.hbs.edu/faculty/Pages/profile.aspx?facId=6530.

(2) Gary Pisano | Harvard Professor of Business Administration. https://gpisano.com/.

(3) What Evolution Can Teach Us About Innovation - Harvard Business Review. https://hbr.org/2021/09/what-evolution-can-teach-us-about-innovation.

(4) About | Gary Pisano. https://gpisano.com/about/.





Copilot's Summary:


The Harvard Business Review article "How Fast Should Your Company Really Grow?" discusses the challenges companies face in achieving consistent, profitable growth¹. The article presents a framework for a growth strategy that encompasses three related sets of decisions: how fast to grow, where to seek new sources of demand, and how to develop the financial, human, and organizational capabilities needed to grow¹.


The article emphasizes that growth, in terms of revenues and profits, is the yardstick by which the competitive fitness and health of organizations are measured¹. However, achieving consistent profitable growth is a near universal goal for leaders and often an elusive one¹.


The article suggests that companies need to take a strategic perspective on growth, considering the interdependencies of decisions in the context of a company’s overall business strategy, its capabilities and culture, and external market dynamics¹.


Source: Conversation with Bing, 3/2/2024

(1) How Fast Should Your Company Really Grow? - Harvard Business Review. https://hbr.org/2024/03/how-fast-should-your-company-really-grow.

(2) Create a System to Grow Consistently - Harvard Business Review. https://hbr.org/2024/03/create-a-system-to-grow-consistently.

(3) How Fast Should Your Company Really Grow? - store.hbr.org. https://store.hbr.org/product/how-fast-should-your-company-really-grow/S24021.

(4) How Fast Should Your Company Grow? - HBR Store. https://store.hbr.org/product/how-fast-should-your-company-grow/84108.



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Categorization


This genioux Fact post is classified as Bombshell Knowledge which means: The game-changer that reshapes your perspective, leaving you exclaiming, "Wow, I had no idea!"



Type: Bombshell Knowledge, Free Speech


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References


genioux facts”: The online program on "MASTERING THE BIG PICTURE OF THE DIGITAL AGE”, g-f(2)2032, Fernando Machuca and ChatGPTMarch 1, 2024, Genioux.com Corporation.
 
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