Managing growth
Nokia CEO, Stephen Elop’s burning platform memo and Cisco CEO John Chamber’s internal memo highlight examples where companies have fallen victim to their own success.
Every business wants to grow year on year. Is there a saturation in growth, though ? Is saturation the easily explainable reason for these challenges ?
While one might be tempted to attribute stagnation to the finite market size growth, I believe we need to look elsewhere for answers.
Put very simply, the competences, the structure, the approach needed for success varies as the business size changes. So, it is not surprising that companies stumble when they grow beyond a certain size. A small company thrives on risk takers (downsides are lower), needs multitude of ideas and has growth prospects for everyone. And when the company grows large – what happens ? Risks need to be more calculated as downsides are higher, overheads increase bringing inefficiencies and corporate ladder structures are established.
Nothing short of a substantial changeover, natural or forced, will put the company back on growth. And not without a painful slowdown in between.
Nokia has a new CEO now, is it Cisco’s turn next ?