Top 10 business maxims that need to go - Part - 5.

Top 10 business maxims that need to go - Part - 5.

 

 

It ain't what you don't know that gets you into trouble.
It's what you know for sure that just ain't so.
- Josh Billings (or Mark Twain or Artemus Ward or...)

 

Much well-known business advice is sadly obsolete but can still be found in articles, business books and, not least, in daily use in the workplace. It seems that some companies are still guided by thinking that is sadly out of date - if it was ever true to begin with.

 

The worst of these old maxims are not only wrong, they're bad for people and bad for business. Businesses who use them are making their employees unhappy and are harming the bottom line.

 

Here's my pick of the top 10 business maxims in serious need of an update - with a suggested replacement for each.

 

Old maxim #5: Grow or die

Meaning: A business is either growing or dying. A business cannot be successful if it is not growing.

 

It is interesting to see how growth has been elevated to an automatic good, questioned by very few businesses and executives. Growth certainly has some positive effects especially because it creates new possibilities and challenges for an organization and its people. I am not saying that growth is bad but that growth is not always right for every business. Sometimes a business might be better off spending a quarter or a year not growing but simply consolidating existing business. Consequently, not growing or even shrinking does not automatically represent business failure.

 

That's what Semco's CEO Ricard Semler meant when he said this:

 

There is no correlation between growth and ultimate success. For a while growth seems very glamorous, but the sustainability of growth is so delicate that many of the mid-sized companies which just stayed where they were doing the same thing are much better off today than the ones that went crazy and came back to nothing. There are too many automobile plants, too many airplanes. Who is viable in the airline business?

 

If someone asks me, 'where will you be in 10 years' time?', I have not got the slightest idea. I do not find it perturbing either if we said, 'look, in 10 years' time Semco could have 500 people instead of 3,000 people'; that sounds just as interesting as 21,000 people. I'd hate to see Semco not exist in 10, 20, 50 years' time, but what form it exists in, what business it's in and what size it is are not particularly relevant.

 

Growing also entails its own risks, especially fast growth on borrowed money. This almost killed Patagonia in the early 90's. Founder Yvon Chouinard says this:

 

It was back in 1990 or so and we were growing the company by 40 to 50 percent a year and we were doing it by all the textbook business ways -- adding more dealers, adding more products, building stores. Growing it like the American dream, you know -- grow, grow, grow. And one year we predicted 40 to 50 percent growth and there was a recession and all the sudden we only grew 20 percent. And at the same time, our bank was going belly-up and we had cash-flow problems and it went to absolute hell. And I had been the person who had never bought anything on credit in all my life. I always paid cash for everything, and to have to call someone and say, "I'm sorry, I can't pay my bills this month," was killing me. And I realized that I was on the same track as society was -- endless growth for the sake of growth.

 

That's when I decided to put the brakes on and decided to grow at a more natural rate -- which basically means that only when our customers want something do we make more, but we don't prime the pump.

 

New maxim: Grow when you gotta.