Better Isn’t Bigger: The CEO’s Growth Illusion

Even the most remark­able CEOs can lose their grip on growth. It isn’t a lack of genius or dri­ve that stops them; most lead­ers have those in spades. Instead, they become vic­tims of ​“spa­tial dis­ori­en­ta­tion” — get­ting so buried in the high-pres­sure dynam­ics of the busi­ness that they lose their sense of direc­tion. They believe they are nav­i­gat­ing toward growth when, in real­i­ty, they have unknow­ing­ly shift­ed their focus entire­ly to busi­ness improvement.

Bet­ter vs. Big­ger: The Real Growth Real­i­ty Check

There is a fun­da­men­tal truth that every leader must face: Improv­ing a com­pa­ny is not the same as grow­ing it. Refin­ing your sys­tems, tweak­ing your prod­ucts, and stream­lin­ing your oper­a­tions are all wor­thy endeav­ors, but they rarely dri­ve growth. These actions strength­en your foun­da­tion and boost your prof­it per unit (what we call your ​“X”), but they don’t help you sell more X’s.

Real Growth is specif­i­cal­ly defined as increas­ing the num­ber of X’s you sell — whether those are trans­ac­tions, sub­scrip­tions, or cus­tomer vis­its — while at least sus­tain­ing your prof­it margin.

The Decep­tion of Improvement

It is incred­i­bly easy to mis­take busi­ness improve­ment for busi­ness growth because improve­ment feels use­ful. You might be work­ing hard­er than ever, your sys­tems might run like a Swiss watch, but the busi­ness is actu­al­ly stand­ing still.

As com­pa­nies grow, they nat­u­ral­ly become more focused on effi­cien­cy and prof­itabil­i­ty (prof­it per X) at the expense of sell­ing more X’s. You can have a beau­ti­ful­ly man­aged busi­ness that nev­er actu­al­ly grows, and many CEOs do.

The Sto­ry of Juan: Audit­ing the Gap

Con­sid­er Juan, a sports retail CEO who built a sub­stan­tial enter­prise but hit a frus­trat­ing plateau. When we audit­ed his orga­ni­za­tion, we looked at two dif­fer­ent lev­els of focus: the company’s total resources and Juan’s per­son­al time.

The num­bers were a wake-up call:

• The Com­pa­ny: His entire orga­ni­za­tion was devot­ing less than 10% of its resources to sell­ing more X’s, while 70% went toward inter­nal improvements.
• The CEO: Per­son­al­ly, Juan was spend­ing less than 20% of his time on actu­al growth activ­i­ties — the rest was con­sumed by man­ag­ing store oper­a­tions and solv­ing day-to-day staffing challenges.

Juan was mak­ing the com­mon assump­tion that spread­ing resources across the busi­ness would nat­u­ral­ly gen­er­ate growth. Instead, it was dilut­ing his efforts. To get back on track, he had to inten­tion­al­ly rein­vest in activ­i­ties that direct­ly dri­ve growth — more X’s.

Cal­i­brat­ing Your Levers

As a CEO, you have a lever that con­trols how much the com­pa­ny focus­es on oppor­tu­ni­ties ver­sus prob­lems. When you adjust this lever too much toward prob­lems and nobody spends time on growth oppor­tu­ni­ties, the busi­ness stops growing.

Your job is to con­stant­ly cal­i­brate this lever so you have enough focus on oppor­tu­ni­ty to keep grow­ing, while still main­tain­ing enough prob­lem-solv­ing to keep the busi­ness stable.

Chal­lenge:

• Think about your con­ver­sa­tions with your team in the past few weeks: Were you direct­ing their focus more towards oppor­tu­ni­ties for growth or fix­ing prob­lems and improv­ing the exist­ing business?

You can read more about this in Chap­ter 6 of The 4 Forces of Growth.

Resources:

Arti­cles

• Growth Isn’t What You Think It is
• Why Your Com­pa­ny Isn’t Grow­ing and the Inter­view Every Leader Should Watch
• The Most Dan­ger­ous Place for a Com­pa­ny to Get Stuck
• What Would Hap­pen if You Spent Anoth­er 10% of Your Time on Growth?

Pod­casts

• Ep 137: The 4 Forces of Growth
• Ep 133: ​“Think Time” is the Only Way to Become More Strategic 

Case Study:

• CDN Con­trols: West­ern Canada’s Leader in E&I Main­te­nance, Scales Radically

Book: The 4 Forces of Growth 

• 4 minute Overview
• 45 Minute Webinar
• Buy on Amazon

Book: Scal­ing Up

• 45 Minute Webinar
• Arti­cle: 10 Years After Scal­ing Up: What I’ve Learned About Growth

Book: Your Oxy­gen Mast First

• Assess your­self
• Resilience Webi­nar