Since our recent piece, ‘Where Do We Grow from Here?’ conversations seem to have been in the air about business growth. How should we grow? Where should we grow? What does growth even mean? We’re not the only ones asking….
In the past year, we’ve completed a number of large, stakeholder-engaged strategic planning assignments with a diverse list of clients. All have been inspiring, but three explicitly confronted the question of growth, and what it meant to them.
It’s not all about the money. Can you define ‘growth’ differently?
One anticipated expanding their client-base and services by growing into two more US states. To succeed, they’d need to win business from their competitors—a classic, zero-sum competitive frame. Yet this was likely to be disruptive in the very communities they were setting out to serve and support. They’ve since elected instead to merge with a values-aligned competitor, creating a new whole that’s greater than the sum of its parts.
A second client, this time a professional services firm, is evolving from an owner-operated, founder era to an executive-led, growth era. ‘Growth’ for their team is as much about enhancing skills and developing people as selling more services and delivering more work. It’s also a clear question of leadership, as the founder delegates more and more of his authority and responsibilities. In this case, growth required a new governance model and leadership framework—not directly ‘growth’ issues, at all.
In the third case, this time a spectacularly successful and inspiring charitable fundraising organization, growth is a more systemic question: to raise more money for their cause, they need to increase the number of donors in their community, and the amount they’re giving. Rather than cutting themselves a bigger piece of the pie (thereby cutting out other important causes), their strategy evolved to consider how they might make the pie bigger for everyone, instead.
Why is business ‘growth’ so easily just about revenue and profits?
Mainstream media seem enamoured of stories of ‘exponential growth’ and frolicking ‘unicorns.’ On reading the business pages of the New York Times or the Wall Street Journal, one could be forgiven for seeing the three client cases we list above as outliers—anathema to the winner-takes-the-spoils ethos of Big Business. This concerns us deeply. Strike one?
On reading Peter Diamandis’s book BOLD: How to Go Big, Create Wealth, and Impact the World, I was dismayed to find it bereft of any consideration of the ethical or ecological consequences of a relentless pursuit of growth, growth, growth. Indeed, each conversation we’ve had to date with the acolytes of ‘Exponential Organizations’ has left us feeling dismayed at the state of mainstream technology circles. Strike two?
Even in-person convenings, where people have the time and space to indulge in nuanced conversation and informed dialogue, remain rife with ‘manels’ (panels on which all the participants are men), or discussions of inclusion and diversity where only white people are invited to speak. Strike three?
Growth is a byproduct of delivering value—not a goal in and of itself.
When financial growth is vaunted above all other goals, is it any wonder Uber spent last year mired in controversy? Is it surprising that Facebook is seeing both its financial and reputational equity tumble after allowing Cambridge Analytica to siphon user data? And don’t get us started on Harvey #u¢king Weinstein and the entertainment business!
No doubt, there will be defenders of Exponential. No doubt there are counterexamples. The problem, though, is that it’s the ‘unicorns’ we continue to celebrate—the tech darlings that achieve $1 billion of pre-IPO valuation—and for no other reason than their growth. At Junxion, we’re far more interested in the zebras. “Change for the common good often comes from the ground up,” not down from the sky like some magical, mythical, horned horse! Using business to enhance people’s lives, to improve community cohesion, to regenerate a damaged ecosystem, those are noble pursuits for entrepreneurs. If they grow, even dramatically, that’s great. Growth is a byproduct of delivering value—not a goal in and of itself. Of course, it’s not simple. We’ve all got something to learn. Hence the question marks after the three strikes above: this conversation surely cannot be closed to all those who aren’t yet citizens of the new economy!
Three ways to begin planning for healthy, holistic growth?
In the past six months, Junxion has helped six companies to navigate B Lab’s B Impact Assessment. Two of them were explicitly preparing for imminent growth, and both of those saw B Corp Certification as a way to ensure their organizations are ready. For them (indeed for all B Corps), three central aspects of the BIA point to a healthy, holistic ‘growth’ curve:
They embed stakeholder consideration in their governance DNA. All B Corps are required to embed in their Articles of Incorporation a statement binding Directors to consider all stakeholders’ wellbeing—not just that of shareholders—in their decision-making. Once it’s in there, Directors must make more inclusive decisions. As a result, they consider factors like workers’ wellbeing, community impacts and investments, ecosystem risks and footprint, along with the typical questions or ‘value’ and financial performance. The businesses they govern, perhaps not surprisingly, tend to be better at anticipating change and challenge, and more agile and successful in their responses.
They design for ethical workplace behaviour. In the past week, I’ve heard of three companies that learned through their B Corp Certifications or renewals that they were missing the mark on gender pay equity. Like it or not, most companies remain secretive about this stuff—even in the age of #metoo. (This will shock few readers, we know.) Starbucks’ admirable announcement that the company has achieved gender and race pay equity across the United States is echoing across small to medium-sized businesses. Norms change because leaders take a stand. Starbucks has. Countless B Corps stand with them.
They measure and manage their environmental footprint. OK…. we’ll take our proverbial foot of the rhetorical gas for a minute. Most entrepreneurs want to grow their businesses. Often, they’ve taken enormous, personal risk to be in business in the first place; they want and deserve some reward for their efforts. The difference is that forward-thinking entrepreneurs recognize they’re part of a much bigger, utterly interconnected, global system, and that the history of enterprise has not been good to the environment. So they measure and manage their environmental footprints and overwhelmingly find opportunities and efficiencies there. (Many try, too, to put metrics against their social impact, using scores within the BIA and other tools like the Sustainable Development Goals.)
Why should you bother to think so holistically as you embark on your next round of strategic planning? Do it because ethical companies weather economic downturns more successfully. Do it because sustainable companies deliver better shareholder returns. Do it because healthy workplaces make for better employees.
If you’re still embarking on your strategic planning with the question ‘How will we make more money?’ then we’re here to tell you to Shift Your Thinking. There’s more to business than money.
Let’s start with an inspiring conversation?…
Mike Rowlands is President & CEO at Junxion Strategy, and Shayla Mayer is a Consultant in Junxion’s London office.