Rethinking Growth at All Costs

HBR IdeaCast

Harvard Business Review

Leadership, Entrepreneurship, Communication, Marketing, Business, Business/management, Management, Business/marketing, Business/entrepreneurship, Innovation, Hbr, Strategy, Economics, Finance, Teams, Harvard

4.4 • 1.9K Ratings

🗓️ 27 February 2024

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Many companies, especially in the tech world, have come to embrace the idea of growth at all costs. But according to research from Gary Pisano, professor at Harvard Business School, most firms fail to consistently increase revenues and profits over the long term, adjusting for inflation. He says that it’s important for leaders to think more strategically about not just the rate of growth they want to achieve but the direction they want to grow in and their method for doing so. Trying to grow too fast can be the downfall of many organizations. He shares examples of companies that have fallen into this trap, as well as those getting the balance right. Pisano wrote the HBR article "How Fast Should Your Company Really Grow?"

Transcript

Click on a timestamp to play from that location

0:00.0	Welcome to the H-BRA Ideacast from Harvard Business Review. I'm Allison Beard.
0:15.0	How do you measure success at your company? I bet that a lot of you, if not all of you, will say growth.
0:27.0	Whether you're an entrepreneur, store manager, team leader, business unit head, or CEO, the goal is to increase revenues by as much
0:35.5	and as quickly as the market will allow.
0:38.0	But is that realistic?
0:39.5	Is it sustainable?
0:41.0	Our guest today has studied the performance of nearly 11,000 public US companies
0:44.8	over two and a half decades and found that for most businesses the answer is no.
0:49.0	Three quarters of firms showed little to no growth after adjusting for inflation and
0:53.7	even those in the top quartile of growth in a certain year weren't able to keep that
0:58.2	performance up for more than a few. So what is the key to study sustained growth?
1:04.0	Gary Bazano is a professor at Harvard Business School who's done deep dives into the strategies of organizations that both succeed and fail at this.
1:12.0	He says that leaders need to be much more thoughtful about the way they set growth targets
1:16.7	focusing on not just market demand but also their capacity to need it
1:21.3	and how they map out plans for achieving them.
1:24.0	Gary wrote the HPR article How Fast Should your company really grow.
1:28.0	Hi Gary.
1:29.0	Hi, Allison, thank you. Great to be here. So let's start with the problem. Has this
1:38.4	obsession with rapid growth always been a feature of investor-led capitalism or has it become more pronounced
1:46.2	in recent years or decades?
1:48.8	I think it's always been an obsession of companies at least as long as, you know, throughout my professional life,
1:54.0	which is now, you know, close to somewhere between 36 and 40 years, depending on how you measure
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Harvard Business Review, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Harvard Business Review and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.