Escaping the Growth Curse

Established companies’ growth usually stalls.

The growth trajectory of well-established companies almost inevitably plateaus, contrary to investors’ hopes and expectations. Therein lies the “growth curse.” Investment managers insist on growth; boards of directors, CEOs, and corporate managers strive to meet those expectations. However, when growth proves unachievable, companies often try to provide something that looks like growth, flying in the face of what’s really happening. A few companies win this risky game, but many more lose.

Strategically coming to understand that growth is not limitless requires a new way of thinking and a fresh focus on the future built on strategies that ensure long-term prosperity, even during a plateau period. 

In theory, boards try to recognize what lies ahead, but, in fact, they usually provide mere oversight as they rubber-stamp their executives’ strategies. Instead, the boards of mature companies should exercise strategic governance amid measured progress as part of their primary role: representing the corporation’s stakeholders.

Short-term growth is often...