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Ed Hess ehess@darden.virginia.edu
Theres no scientific research in any discipline that supports these commonly believed myths. At best, they are half-truths; at worst, they are pure fiction.
The Truth
Growth can be good or it can be bad. Too much growth before preparation can overwhelm people, processes and controls.
The Truth
Growth can 1. Stress quality controls 2. Stress financial controls 3. Dilute ones customer value proposition 4. Dilute ones culture
The Truth
Bigger is not always better; the bigger, the more bureaucratic and complex. Complexity may exceed management capabilities and experience. Grow or die is not based in science or business reality. A business must only increase revenue in pace with cost increases. Grow and die is just as likely. Improve or die is better.
What issues did she have to solve to create a business model? 1. Design of product 2. Manufacturing of product 3. Sales 4. Distribution
Image courtesy Eyebobs.com
CEO Quotes
You dont want to bring on all the business that you cangrowth can easily swallow you. Business is a lot like sailing. You know where you are and where you want to go, and it takes a whole lot of tacking to get there.
Growth Research
Business research Consistent above average grow is the exceptionit is rare.
: NOPE!
Growth Research
Business research (cont.)
Growth profits.
Growth Research
Consistent, high performance companies have
STRATEGIC FOCUS
Growth Research
Consistent, high performance companies have
OPERATIONAL EXCELLENCE
Growth Research
Consistent, high performance companies have
CONSTANT IMPROVEMENT
Growth Research
Consistent, high performance companies have
CUSTOMER CENTRICITY
Growth Research
Consistent, high performance companies have
Growth Research
Biology research Many species limit their growth to increase their chances of survival, because growth beyond an optimal size can increase the risks of being eaten by predators.
Growth Research
Biology research (cont.) Many organisms have a finite amount of energy to allocate to reproduction, growth, maintenance, and survival. In some species, growth requires so much energy that growth cannot occur continuously but must alternate with periods of no growth.
The gas
4.
1.
Toyota
Jet Blue
Starbucks
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2.
Use the Growth Risks Tool to weigh the pros and cons of growth and illuminate your risks.
References
Portions of this presentation are adapted from:
-Edward D. Hess, Grow to Greatness: Smart Growth for Entrepreneurial Businesses, (Stanford Business Books: Stanford, 2012).
-Edward D. Hess and Gosia Glinska, Eyebobs Eyeware, Inc., Case Study UVA ENT-0139, University of Virginia Darden School Foundation, Charlottesville, 2009. All anonymous CEO quotes are from the Darden Private Growth Company Research Project.
CEO Talks