Grow or Die. It's probably the most common business axiom, and the least accurate, according to the new book "Smart Growth: Building an Enduring Business by Managing the Risks of Growth" (Columbia Business School Publishing). To better understand the book's implications, Consulting's One-on-One sat down with the book's author, Ed Hess, a former Arthur Andersen strategy consultant and current professor at the University of Virginia's Darden Graduate School of Business.
Consulting: What's wrong with the concept of 'grow or die'?
Hess: As a business practice, I don't think it's ever been true. It became a popular concept after appearing in a Time magazine article in 1957, but it doesn't bare out when you research business finances. There's just no empirical data to support the idea that businesses have to grow or die. It's pure fiction. What companies have to do is constantly improve their customer value proposition more than their competition. This may result in growth, but it doesn't necessarily do so.
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