Growth -

Old myths; new realities


Robert M. Tomasko



Last year a client wondered why Citicorp's ex-CEO, John Reed, had invested so heavily to support the research of an eclectic group of biologists, economists and mathematicians at the Sante Fe Institute. I was asked to look into what was going on there, and see if any of their research into complexity and chaos theory could shed some light on understanding how businesses grow.

Several months of examination made it clear that the ideas in my book Go For Growth complemented the work pioneered at Sante Fe. For my client, I recast the book to reflect the lessons of the complexity gurus, including a reconsideration of several popular myths about growth:


Old-myth: For my company to grow, yours must shrink

New-think: Assisting rivals grow the industry will payoff better than destroying them. "Live and let live" can have big long term payoffs: Coke needs Pepsi; MCI needs AT&T; and Xerox needs Canon.


Old-myth: Wars are won by winning every battle.

New-think: Sustained growth requires adapting to changing circumstances and learning from failures - not getting it right every time. Success can lead to forgetting that you're doing some things wrong - mistakes that, if ignored, lead to future stumbles.


Old-myth: Growing a business means making it bigger.

New-think: The object is to get better, not bigger. Size eventually slows growth, and slow growth means less control of your destiny.


Old-myth: The best products will do best in the marketplace.

New-think: Inventors of the best products often find themselves "locked-out" of their market's greatest rewards. Second-to-market has real advantages if you are driven more by what customers want, not what products offer.


Old-myth: Markets always find a point of equilibrium: supply and demand balance out, growth slows and profits diminish.

New-think: Industries that process information instead of raw materials never run out of supply, returns increase - not diminish - and new supply actually creates new demand!


A 6th myth - the way to success is by imitating the best practices of industry leaders is discussed here.



© Robert M. Tomasko 2002


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