After victory, tighten the straps on your helmet.
Tokugawa Ieyasu
Hey, it’s Jerry Garrett here, and I’ve got a fresh topic for you this week: the Sustainable Growth Cycle. So, what exactly is it, and how can you use it to your advantage?
Picture this: a system growing infinitely and without limits. Sounds great, right? Unfortunately, it’s a common mistake to believe that’s possible. Systems typically have a natural size, and exceeding that can cause many issues. For example, take your cells. They grow at a specific rate and size, ensuring new cells replace those that die. When balanced, your body functions perfectly; but if cell growth spirals out of control, it can threaten your life.
Businesses are similar. They have multiple interconnected parts that change and grow over time. If any aspect grows too large or unruly—just like cells in the human body—it can jeopardize the entire operation. To avoid this danger, companies follow a sustainable growth cycle with three main phases: expansion, maintenance, and consolidation.
During the expansion phase, businesses focus on increasing revenue and profit margins while building relationships with other companies. They develop new units, hire staff, and create future plans.
In the maintenance phase, they execute those plans by fully engaging their marketing, sales, and value delivery systems. The company explores the full potential of its operations to succeed.
Finally, during the consolidation phase, businesses analyze their actions to determine what works and what doesn’t. They trim away inefficiencies while strengthening successful strategies.
However, some CEOs or founders may become frustrated when growth appears to stall. Instead of recognizing this as part of the sustainable growth cycle, they might assume their business idea is flawed. But remember – understanding these cycles is vital for long-term success in any industry. You might think that focusing on growth for your entire company is a waste of time, but let me paint a different picture for you. Imagine a business thriving on expansion, where growth multiplies like wildflowers in a field. At first, you revel in the short-term rewards such as increased profits and numerous opportunities. However, soon enough, your once-personal business spirals out of control.
As it consumes more resources and energy than you ever imagined, operating the company becomes an uphill battle. Remember, each part of the system is like a cog in a well-oiled machine – indispensable. You can’t remove any of these phases without damage.
So, how do we ensure long-term success? By maintaining a healthy balance between all three phases of the business cycle.
Read the original one from Josh Kaufman here: https://personalmba.com/sustainable-growth-cycle/
And with that, I’ll see you next week. Goodbye!