Never ending business growth is bordering on an impossibility. Does a counter intuitive ‘shrink to grow’ really make sense? Bigger and bigger is not always better.

Is growth for growth’s sake sustainable? Is it true that those who have the mental acuity to change their minds, are the real movers and shakers?

Is it better to try and be everything to everyone, or focus on select areas? Growth at all costs is an addiction. In the final analysis, business history suggests constant enlargement risks a painful cancerous carcinoma.

When faced with saturated markets, intense competition, technical disruption and economic volatility, conventional wisdom is often to respond by scaling up operations, diversifying product ranges, all with the aim of growing market share.

However, in the pursuit of ‘bigger and bigger’ the results are often bloated bureaucratic hierarchies, inefficiency and just plain strategic rudderless drift, being blown about by the next tempting gusts of business fashion.

Every gardener knows the importance of pruning back growth shoots to focus the plants energy.

More is not better

‘Less is more’ has long been a guiding principle in design and architecture. There are buildings that seem to be literally all over the place, balconies and structures jutting out in odd places, lending to feeling of imbalance, confusion, one’s eye just does not know where to settle. Contrast this with the pleasing effect of a simple elegant design.

Read: Business enlightenment: Can you attain acute level of awareness?

“Consistent growth is elusive. When we studied the growth patterns of the 3,000 largest companies by revenue, we found that only one in 10 was able to grow its revenues for at least seven of the past 10 years,” reports McKinsey and Co.

It continues, "These consistent growers developed the mindsets, pathways, and capabilities necessary to achieve sustained and profitable growth and, not surprisingly, outperformed their industries—by 7 points of excess total shareholder returns on average.”

And advises, “But what if you lack a consistent growth engine? The best approach may be to first trim off businesses that are a drag on performance—good portfolio management practice regardless of your growth profile. This frees up capital for investment in initiatives with higher growth and profitability potential.”

Back to basic principles

Sense, seize and reconfigure – are the phases of applying a shrink to grow approach, underpinned by some basic principles: focus, effectiveness, innovation and agility.

Disciplined focus – on core competencies. What is the firm really good at, where does it have a distinct value proposition that creates and captures tangible – take to the bank - value? Trying to be all things to all customers, ends in disappointing red ink losses.

Operational effectiveness – means reducing complexity. Strangely, it is easy to make any process complex and convoluted, much more difficult to cut out all the unnecessary duplication and clutter.

Make the organisation s

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