Leadership

The Secrets to Sustained Growth

The common strategies of high-performing businesses

Written by Kim Shiffman

Your company is growing by leaps and bounds — but will it still be in five years? For “What Happens to Gazelles?” a trio of researchers, including Simon Parker of the University of Western Ontario, investigated whether certain management strategies are associated with sustained growth. To do so, they interviewed the CEOs of 121 independent, mid-sized firms that had grown quickly over four years. Then, they tracked the firms’ performance over five more years.

They found that many of the companies that continued to grow did a few of the same things right:

1. They had leveraged a single dominant product rather than diversifying (likely reflecting the risk of new-product development)

2. They didn’t rely on customer complaints as a basis of quality control; and did not sell shares to employees. (The authors admit that further research would be necessary to understand the last finding.)

3. The most powerful conclusion: “Firms are unlikely to be successful if they attempt to draw lessons from observing growth in one period and applying these lessons routinely at a different point in time.” In other words, today’s best practices probably won’t work tomorrow.

Originally appeared on PROFITguide.com
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