Some thoughts regarding growth

Some stories about the growth

Growth is not the a self evident target for every company. In fact primary goal for many entrepeneurs is not the growth it self, but another goal and the growth just happens to take place while achieving some other primary targets (Carsrud and Brännback 2011). In fact high growth is quite rare and too often a popularized topic by the media. The reality is that from the start-ups only 3% manage to grow over 100 employee enterprise.

Growth is linear only seldomly. Must of the todays success stories are the very same companies that struggled sersiously and a long time prior their first success. One of the leading drug development companies Amgen, which was created in 1980´s, had to work several years before their first launch. In the end the company was saved by the drug that was listed as an after-thought. Rovio as another example had to develop 51 games before its they finally started to rock and roll.

Which is more important growth or the profitability? Shareholders expectations are not automatically in harmony or symmetry. If we over look the profitability, does the market share increase and growth turn to a profitability? If you are an athelete, will your fat turn to a bit more useful tissue – muscle – if you train hard enough? Quite a few CEO´s keep asking their boards and their main owners over the years, which parameters should he prioritize. Is it ok to divorce the growth from the profitability?

High-growth is rarely the prerequisite of high profitability. Recently several studies (Markman and Gartner 2002; Brännback et al. 2009;Davidsson et al. 2009) show that in reality high growth companies end up being partial disappointments. As an entrepeneur I have learned that it is all about the context. Growth and even more a profitable growth is an outcome of multiple parameters that correlate with each others in some still unkonwn mathematical form.

It always starts from the right people, who form together the first business plan. The first business is never the last business plan. Your company can be a high growth company already next year, and if not it may be one after 15 years. ”Agility” is equally as good value for the company as as ”patience”.

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