I recently had a chat with some friends about how life passes us by at a tremendous rate. And the older we get, the faster time flies by. The factor that best shows this is the growth of our children. The eldest is 22 years old. It seems like only yesterday that I couldn’t tell my family over the phone that mother and daughter were okay because I had such a lump in my throat.

Therefore, growing up is a natural phenomenon for humans and even for animals, other things being equal. Somehow, though, we made it a big problem for our companies. Investors demand that companies grow in order to increase their profitability. They reward companies that provide them with a higher share price, and company management is rewarded with high compensation and incentive packages.

Because of this, companies have a vested interest in making sure their revenues grow. At the same time, they must ensure that they are also profitable. Often these two goals are mutually exclusive. According to recent research by IMD’s Peter Lorange, only about 40% of companies manage to grow and be profitable.

Quite interesting, from a value-based perspective, there are 3 financial drivers of value associated with growth:

• growth duration. This refers to the period during which it has as high a cumulative annual growth rate as possible. It’s management’s job to make sure they embrace projects that produce this result. In the absence of this phenomenon, eventually the best the company can hope for will be a growth rate at the maximum of the economic growth rate of the country in which the company is located. Business managers in this position are in danger of being fired when their company is taken over by competitors.
• Billing growth. This factor seems to be quite simple. After all, sales is about increasing volume at a given price, or increasing both volume and price. However, it is far from simple, as it requires many intangible factors to be in place. Here we mean the optimal customer segments, with the optimal customer value proposition, using the optimal distribution channels with the optimal marketing message, and linking the customer to you in a way that blocks competition and client lock.
• Earnings growth. Profit is about the difference between price and costs. Both variable and fixed costs. And volume plays a role in the case of fixed costs, on a per capita basis. The higher the volume, the lower the fixed cost per capita and the higher the profit per unit. The link between price and cost is driven by efficiency, how simple and efficient your operating model is, how productive and competent your employees are.

It is also very interesting that companies can grow too fast. Your investment needs may be outweighed by your cash flow needs due to a working capital requirement and a fixed asset investment requirement. Companies should remember this when pursuing the growth imperative!

That being said, the common denominator for all of the above types of growth is the people in the organization. You need committed people who are committed to the organization’s vision, mission, purpose, and strategy, who are productive and hard-working. You need people who are trained and developed, and who have an employee value proposition that is as attractive to the employee as the customer value proposition is to the customer. Without these types of people, there will be no long period of high growth, no revenue growth, and no profit growth.

Growth also requires the growth of the organization’s leaders. Strong and visionary leadership is a prerequisite for strategy implementation. And this requires the growth of the individual in a significant way, making him grow emotionally and spiritually in a significant way.

I was recently lucky enough to accompany a group of MBA students from the University of Stellenbosch Business School on a study tour to France and Belgium. As part of the tour, we visited the European Commission office in Brussels. There I saw the following emphasis on growth:

• Smart growth: investing in knowledge and innovation. This is the type of growth referred to in the previous paragraphs. We need to become more knowledgeable and creative than we currently are. And this is a continuing truth. We never got to the point where we can relax when it comes to this! However, as companies and teams, we also need to be aware of and care about Albrecht’s Law. Karl Albrecht stated that “intelligent people, when grouped together, tend to collective stupidity.” To avoid this, we need people emotionally and spiritually who are capable of creating synergy, where the whole is greater than the sum of the parts.
• Sustainable growth: promoting a greener economy. We have to be aware that we cannot grow at the expense of our planet. However, sustainability also requires that our business models and strategies be good enough to ensure the company’s survival in a competitive environment. Of course, too often we emphasize “sustainable” growth in our business models and strategies and ignore the needs and requirements of the planet. We do this at our own risk, hence the EC’s focus on a greener economy!
• Inclusive growth: fostering a high-employment economy. Technology has become an asset and a curse, depending on how you look at it. We use technology to solve a lot of problems, but we often create more problems in the process. Increasing productivity through the use of technology is great. However, this often results in jobless growth, which on developing companies can have a devastating effect. So to be socially responsible, we must grow our businesses and economies with the admonition to foster a high employment economy in mind.

So far we have talked about the company. This does not mean that individuals can sit back and expect others to take care of them. He or she also has a responsibility to ensure that they grow as individuals, increase their skills, and are and remain employable regardless of the direction of the economy. Once again, you must understand that this journey of personal growth is a never-ending journey. If they don’t, growth will happen to them, and not necessarily for them and often (mostly?) not for their benefit!

The reality is that the absence of growth is not stasis, it is regression and, ultimately, death. In relation to others that do grow, you don’t stay still if you don’t grow. You’re late. This is the case whether you are an individual or a company.

So growing up seems to be essential. But it seems to be like thinking, which, according to Henry Ford, is so difficult that very few people actually engage in it. People struggle to grow, which probably explains why so few companies grow optimally and properly.