Growth

Increasing production volumes without improving overall efficiency amounts to excess fullness, which needs to be eliminated. Management must consider the minimum growth required for the company. What is the minimum growth rate below which the company could lose its strength, its ability to develop, or at least its ability to survive? It is essential for a company to maintain a promising position in the market. Without this, it will soon find itself on the sidelines. Its size will not meet market requirements. If the domestic or global market is expanding, the company must grow alongside the market to maintain its viability. Thus, sometimes, a very high minimum growth rate is necessary. A business must develop correctly—it needs to build muscle, not accumulate fat. Any growth that leads to an increase in overall resource efficiency in a short time is healthy growth. However, if growth is just about expanding production volumes and doesn’t lead to increased overall efficiency within a sufficiently short period, it is mere accumulation of excess fat. Any increase in production volumes without improvements in overall efficiency necessitates eliminating this excess fullness. Any increase in production that results in decreased efficiency must be rapidly addressed through radical means—by surgical intervention. TIP OF THE DAY: Determine the minimum growth rate necessary for your company to maintain its market position.