10/03/2004

Is Your Growth Strategy Your Worst Enemy?

From Dispatches Weblog quoting from and commenting on an article from The McKinsey Quarterly:

""History is littered with companies that experience 'boom and bust' rapid growth followed by steep decline, often into oblivion...The challenge to finding a sustainable growth rate means striking a balance between growth drivers and constraints.'

The authors go on to describe six principles that are worth repeating:

Every action produces a reaction.
Structure shapes behavior.
Complex interrelationships make a system.
Time clouds the picture.
'Hard' and 'soft' factors interact.
Feedback reinforces and counteracts.

Business decisions made without due consideration of these principals are likely to result in unintended consequences. Young companies that are defined by scarce resources can ill-afford the cost of unintended consequences."