Reilly Newman | Is all growth healthy? In the business world we are inundated with crazy success stories of insane growth. Companies growing 500% in a year or a revenue increase of 100%. Businesses flaunt their size and employee count or even how large their building is, but is all of this really better for the health of the company or staff?
Well, it may surprise you that a lot of business owners don’t realize that not all growth is healthy. Simply increasing revenue may actually lead to having less profit at the end of the day because not all revenue is created equally. When you get a big job, you have an increase in revenue, but you also need to increase expenses and payroll to service the new job. This leads to diminishing returns as the profitability is absorbed by the consumption of the job. This “growth” may look good from the outside, but internally could be series of growing pains as margins disappear and operations, headcount, and communication expand.
When a business is pushed to grow for just the sake of growth, then it leads to a decline in health. This is why most startups we idolize don’t make money and have a constant flow of funding from investors. Sure the startup is sexy and cutting edge, but the health is not suitable for most owners or even desirable!
I write this as a note of encouragement to the business that isn’t experiencing this extreme growth. I say this because, as a business, our goal shouldn’t be to grow at all costs – but to be a healthy organization. This means reasonable deadlines and workflow, healthy profits, and having the ability to make decisions that are in favor of the health of the business.
To create this space for deliberate decisions that aren’t pressured by the focus on growth, we must focus on the holistic view of the business. This view must take into consideration the many aspects that make up a business which includes the general perception of the business. This is why I find that brand is the best way to look at a business.
Businesses will want to squeeze every dollar out of every minute and consider it healthy, while the perception of the over-optimized organization (and staff) suffers. Sure, it may be financially healthy, but you’re now viewed as a cheapskate who nickels and dimes its customers.
The health of a business is a natural priority when you think like a brand. You’re not only considering the financial health but also know that sometimes a decision may not make financial sense or have a direct ROI; it may be a long-term investment that is compounding the brand for the future benefit of the organization, team, and audience.
The priority of a business isn’t just to grow, but to be healthy. Much like humans, this “health” can mean different things to different people and businesses. Nvidia has had explosive growth due to AI, but this growth has been insanely profitable. This is healthy growth that is appropriate for the technology is it bringing to the world. I’ve worked with businesses who have been around for decades and grow consistently by 12-15% per year, this is healthy as well. Their business is compounding and growing in a healthy manner.
This may also mean that every year isn’t a year for growth. Health can mean a year or two of restructuring and gaining clarity as you invest in the brand. This gives you the space to make the appropriate decisions to move the business forward in a healthy way.
All growth isn’t healthy, if this were the case, cancer and tumors would be desired. However, growth done in a the healthy way is fantastic. By focusing on your brand, you will develop a holistic view of what this growth looks like for your business, but also how health is best defined for your business. This could mean more profitable projects, less staff, more time off, or even being prudent of who you work with.
The great thing about health is that it does ultimately lead to growth. However, health isn’t necessarily a byproduct of growth. By focusing on your brand you will prioritize health, which will lead to the appropriate growth for your business. It won’t be easy, but neither is working out or eating healthy… but perseverance will lead to results.
