Sustaining growth is brutally hard. Learn the law of large numbers and why growing a large company is harder than growing a smaller one.
- As central as growth is … to corporate survival and vitality, … sustaining growth is brutally hard. … The first of four big challenges emanates … from what I call the law of large numbers. … Growing a larger company is simply much harder … than growing a smaller one. … Look at Dell Computer. … From 1990 to 2000, … Dell's revenues went from $500 million to over 30 billion, … an explosive growth at about 50% a year. … Over the next decade, … Dell's revenues grew at, relatively speaking, … a snail's pace, only 7% a year. … The law of large numbers is clearly at work here. … If Dell were to keep growing at 50% a year … from 2000 onwards, … its revenues would reach almost two trillion by 2010, … an impossibility given that the GDP of the entire world … added up to less than $70 trillion. … The second factor … that makes it very difficult … to sustain historical growth rates … is limits to market dominance. … Look at Walmart. … Founded in 1962, … Walmart expanded within the United States …
- Recognize the problems a company may encounter if it does not achieve growth.
- Identify high-potential opportunities for growth.
- Identify new customers for existing products.
- Use assessment screens to choose the best opportunity.
- Evaluate partnerships and acquisitions as mechanisms to fuel growth.
- Break down the components of an effective and growth-minded leadership team.