Grow, Stabilize, Then Grow Some More

What do you think a graph showing the growth trend of an achieving company should look like? Should it be erratic, with low valleys and high peaks? Should it look like the side of a rolling hill, gradually but steadily moving upward? Or should it resemble a stairway-rising then plateauing, rising then plateauing? 

American enterprise has paid a dear price for excessive growth. Most of the so-called high growth companies don't grow gradually. They climb like a jet fighter, and fall without a parachute. Companies that insist on a consistent growth rate in excess of 20 percent a year are destined to become troubled organizations fraught with debt, layoffs, and one crisis after another. Every few years, these companies trip themselves up, then realize they didn't leave adequate margin for error. These organizations don't walk to the edge and occasionally test it–they set up camp there. 

The temptation to become a sprinter rather than a long distance runner is great, sometimes compulsive. There's something about flying without a parachute that makes flying more exciting . . . and more dangerous. 

Do your business a favor. Grow, stabilize, then grow some more. 

The darlings that make the headlines and receive the awards are the high-tech whiz kids. The entrepreneur who started a business in his college dorm is news–for awhile. But where is he in five or 10 years? Too often, the answer is bankrupt. The rock 'n rollers lack staying power. It's glamorous while it lasts, but it doesn't last long. High-tech and high growth are seductive. 

So is the attraction to diversification. In reality, only a few individuals or organizations can effectively operate simultaneously in multiple industries. Developing a deep understanding of one product, service, or technology by continuously investing in knowledge is a better tactic. Get better and smarter at what you do, rather than trying to do everything. 

Viable success stories formed over many years aren't the type of businesses journalists use much ink on. Yet these are the organizations led by people who understand business cycles go both ways. They understand the next significant event that happens to their organization might be negative. They know anyone can be a superstar for a while and that insistence on constant, rapid growth is foolhardy. 

In the first paragraph of this Habit, I asked you to identify the best looking "growth graph" among three choices. My choice is the stair-step: organizations that grow, but also plateau to catch their breath, consolidate their knowledge, and fortify their finances. All the while they're planning and preparing for another step up a steeper part of the mountain. 

Fill in the valleys and avoid the highest peaks. Grow, then stabilize. Then grow more and stabilize again.