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The Advantages of Maximizing Natural Business Growth

By Donald Mitchell

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Published: 23Jan2009
Word count: 464
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For years, companies have relied on unsustainable gimmicks to grow their businesses (such as zero percent interest car loans, 125 percent of assessed value home loans with teaser rates, and tripling interest rates on credit cards for those who are a day late with a payment). With the great recession of 2008-?, those practices have been shown to only lead to bankruptcy or being bought out by the government.

What should be done instead? Work on the right things, in the right way, and create a sustainable underpinning for success.

Businesses usually have time to only get around to doing the top few things on their priority lists. The smaller the company, the more likely this limitation is to be true.

Yet, almost no one has business model innovation as a top priority. Even for those who do set an activity as a top priority, the right task must be pursued first in order to gain the best results.

You need a company mission and focus that will emphasize the greatest potential from continuing business model innovation. If a company's mission sets a lower standard than that of a long-lasting core insight superior to the competitors, chances are that the potential for business model innovation will be mostly undeveloped.

Many people have seen situations where companies try to grow too rapidly, and the results are catastrophic. Successful business models by contrast have usually focused on making things simpler, testing opportunities inexpensively before making large commitments, building on competitive advantages, and creating pathways for progress that cannot be blocked by customers, competitors, or others who oppose them.

By this approach, companies, in essence, are selecting business models that make it easier for the company to grow by reducing the difficulty of what the company had to do. They do that by focusing on larger opportunities, providing plenty of resources, and reducing the chances that something could go wrong.

By contrast, the usual path to rapid growth is much like a forced march over heavy terrain carrying a heavy pack. At first, you move rapidly. But gradually fatigue slows you down. Without rest, you eventually drop in your tracks. That's unnatural growth.

By comparison, if you put water lilies into a large pond with the right growing conditions, geometric growth will continue unabated until the pond is covered with its maximum supply of lily pads. Expand that pond around the circumference with the same conditions at any point along the way, and the water lily growth will continue longer at the same rate. A business model can do that for you so that growth can continue rapidly to a much larger size.

Are you ready to develop such a bountiful business model?

What are you waiting for?

Copyright 2008 Donald W. Mitchell, All Rights Reserved

Donald Mitchell is chairman of Mitchell and Company, a strategy and financial consulting firm in Weston, MA. He is coauthor of seven books including Adventures of an Optimist, The 2,000 Percent Solution, and The Ultimate Competitive Advantage. You can find free tips for accomplishing 20 times more by registering at: www.fastforward400.com

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