Why Give a Damn:

Growth for the sake of growth is a double-edged sword. Sometimes it pays off to stay small and stay true to yourself.

Your organization is growing rapidly, which is good. Or so you think.

When organizations (including companies as well as non-profits) grow, they tend to hit plateaus they must pass to successfully continue on their chosen path. Unfortunately, growth rarely (if ever) happens linearly, and to scale an organization from garage to multi-national corporation you need to accommodate massive changes along the way. You will have to change the way you operate.

Often this change is painful. When you were three people in a garage everyone knew about and helped out with everything. This won’t happen when you run and manage a multi-national corporation. Growth will change your corporate culture from one built on deep levels of trust to systems which include the awkwardness of more formal, scheduled performance reviews. This change will touch the very root of your organization: when a little sandwich shop that you start in the hopes of changing the world one sandwich at a time evolves into a national food chain, you start measuring success in three-letter acronyms.

This challenge is compounded at the point you no longer become the sole master of your own destiny: shareholders demanding quarterly growth and board members calling for industry benchmarking change your focus. You inadvertently find yourself, as Author Steven Pressfield once described, “in the belly of the beast”. And this beast demands to be fed by further growth.

But your evolution need not occur in these ways. Organizations choose not to grow at any price. These organizations put their principles, values, beliefs – and quite often a specific mission – first.

Take for example the backbone of Germany’s industrial success, the Mittelstand (loosely translated into English as “SMBs”: small- and medium-sized businesses). These companies are typically just a few hundred employees strong. They pride themselves in producing to the highest quality standards. They are the reason why “Made in Germany” is such an accolade. And they choose to be big fish in small ponds. They are typically family-owned businesses with strong beliefs and principles. These are companies where the founder typically hangs in the CEO’s office and is often his great-grandfather.

What’s notable is how these companies deliberately choose to prioritize values (such as quality and the way they treat their employees) over growth. Quite a few of these companies would be highly attractive acquisition targets for large multi-national corporations or prime candidates for a public listing on the stock market. Yet their owners decided to grow slowly, organically, and only to the extent that their values & beliefs are preserved, if not advanced.

The Open Source movement is a fascinating angle on this approach to growth. In Silicon Valley (and now, effectively around the world) a growing number of founders, dissatisfied with the way business is done, start companies with Open Source at its core. They are out to change the world – but they are doing it under their own terms, with strong beliefs, cultures, and missions.

Mozilla, the maker of the popular Firefox web browser, is one of these organizations. Founded as a non-profit with a mission to “provide choice and innovation on the Internet”, Mozilla took on the mighty Microsoft Corporation and turned a virtually monopolized browser market (thanks to Microsoft’s Internet Explorer) into a thriving and competitive ecosystem. Firefox is a feather in Mozilla’s mission cap. To continue building on its mission, Mozilla is creating WebFWD, an incubator and accelerator program for mission-based Open Source organizations.

Among the first organizations Mozilla is fostering is CASH Music, a non-profit startup founded by musicians to help fellow independent artists market themselves on the Web, effectively making artists masters of their own destiny. When CASH grows, Mozilla grows – not in revenues or headcount, but in expanding its core mission.

Let’s return to that sandwich store. There is a wonderful story from the founders of 37 Signals, a software company which itself chose to grow slowly, carefully, and organically. Their neighborhood has a sandwich shop which makes the best sandwiches. They use carefully-selected ingredients and ensure each sandwich is freshly-made. Customers love the little shop. Every day at lunch time long queues form outside of the shop. Usually the shop sells out long before meeting all the demand. They are often asked why they don’t produce more sandwiches, as higher production would allow them to serve more customers, grow their business, and ultimately make more money. The owner’s response is: “It wouldn’t be the same shop. It would hamper quality as we couldn’t deliver the same product for our customers”. They wouldn’t be able to change the world one sandwich at a time.

Building your organization around true values, beliefs, and a mission gives it a human quality. Which can be far more valuable than growth and sheer profit. And just what we need. As human beings.

Burning Question:

How do we overcome this oxymoron and create organizations that both grow and stay true to their values and beliefs?

Update: Reflecting back on this post and having worked with numerous entrepreneurs and their companies on their growth plans since then, I still believe the core message is true. Today I would emphasize the fact that this doesn’t mean you have to stay small though – the world needs you and your company to solve the problem you’re solving on the biggest scale possible. Just make sure that you don’t grow for the sake of growing.

Pascal Finette

Author Pascal Finette

Pascal is the Managing Director of Singularity University's Startup Lab. He is also an entrepreneur, coach, and speaker who has worked in Internet powerhouses, such as eBay, Mozilla, and Google, and Venture Capital—starting both a VC firm and accelerator program.

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