I bet you’ve all heard these things before:

“Once we grow 20-30 percent more, we will have the scale we need to be more profitable”

“If we buy our largest competitor, we will have the scale to better serve our customers on a national level”

“At our current size, we aren’t able to effectively compete in this marketplace. We need to double our size to get a competitive advantage

What’s surprising is that we’ve heard these things from companies with $2 million in revenue and we’ve heard these things from companies with $10 billion in revenue, plus everyone in between. Even more surprising is that we’ve worked with a prominent technology firm that was $500 million company that has now grown to a $2 billion companythey believed that they needed to double in size when they were a $500 million company and today, they believe they will become an acquisition target unless they can become a $10 billion company. And, in fact they are right!

So, we have an apparent paradoxcompanies always seem to have a need to grow much bigger than they are to reach a “strategic aspiration”profitability, market supremacy, or a superior customer offering. And yet, when they achieve that aspiration, companies inevitably feel the need to grow further to reach their next plateau. It becomes a cycle without end.

Here are a few things to think about as you face this growth conundrum:

  1. Growth is important to every company, and at every levelwhen done right, it’s what creates value for customers, employees, entrepreneurs, business owners, and shareholders of public companies
  2. All else equal, bigger companies have more assets, capabilities, and strategic options than small companiesalthough larger companies also have challenges that create headwinds for growth
  3. Companies at all levels have the ability to find a strategic niche or exploit a capability that can propel growthonce this “growth engine” is tapped, it can drive the company to the next level,
  4. Most businesses don’t have an “optimal size”It’s often true that reaching the next plateau creates significantly more value, but the next level also creates a new growth challenge, which may be different from the first
  5. Feeling and satisfying your thirst for growth is goodit’s what fuels entrepreneurial growth and provides an ambition to drive a company forward

The bottom line is, that you shouldn’t be surprised that a new growth challenge springs forth each year as you reach new heights. The companies on the Inc. 5000 list are achieving double-digit growth, year after year, and many have done that for many years.  Those that have been on the list for five or more years are a different company than they were five years ago. So, while they needed to grow to their current size to reach their former ambitions, they now are presented with new, grander ambitions that will pave their way to opportunity going forward.

Do you feel the pressure to continually grow to the next level?  Share your thoughts on how you’ve dealt with those challenges.  We can be reached at karlandbill@avondalestrategicpartners.com.