Tuesday, March 21, 2006

More on growth

When I was growing up, I had the impression that companies existed to provide goods and services for customers. I'm sure I was quite naive. I knew there was competition, but it seemed sufficient for most companies I encountered to do a good job at what they did; they didn't also have to grow at a constant CAGR to be successful. As Emery and Trist said years ago, some companies seemed to be in the placid, randomised environment, with others in a placid, clustered environment.

As time marched on, many and, arguably, most companies have moved into Emery and Trist's turbulent fields. Growth has become the goal: 10%, 15%, or more a year. That's arguably okay, when companies are at the front or middle of their S-curve, but few of us are content to see growth plateau near its end. We push forward to find new S-curves to ride to continue or increase our growth rate.

Is that a good idea? Are we helping the world or hurting it? It's easy to say we're pushing our own competitiveness, in line with our belief in the free market system, and relying on the invisible hand of the market to keep us from doing anything with long-term negative consequences. It's easy to say we get better products and services through an adversarial system that pits product against product, service against service.

I'm no longer sure that's true. See Donella Meadow's How Many Experts Do We Need Before We Heed Earth's Warnings? for related thoughts. As in many cases, context matters. I'm pretty sure that competition and growth are vital for improving our situation at certain times. I wonder if serious growth and aggressive competition are normally appropriate only at certain times in the lifecycles of companies and technologies. Much as we don't expect to see growth in humans and other animals after they mature (unless they're taking steroids or getting fat, and we say we don't regard either as healthy), perhaps we shouldn't expect companies to grow constantly. Perhaps the goal of a company really should be to provide a service to people and to society and to get compensated in return, in that order.

Perhaps we should accept the S-curve as more of a guiding principle. Years ago, when we weren't near the carrying capacity of this planet, growth seemed to be a reasonable goal. Today, more and more are saying we've reached or exceeded the capacity of the earth to sustain society; perhaps these times call for a vastly different approach.

Perhaps we've become so used to being teenaged in our corporate lives that we feel lost when we aren't growing at astounding rates annually. Perhaps if we grew when (and because) we had a real contribution rather than because growth is expected, we'd be more likely to create a sustainable future for ourselves and our descendents.

When I re-read this, I'm a bit nervous that some will see it as a call for laziness, a call for stagnation, and a failure to acknowledge economic realities. I don't see it as even close to that. It seems that we have a sufficient number of hard, challenging, and vitally important problems to address to keep us busy for a very long time. I know people are working on many of them, but it seems a bit as if we're focusing so heavily on economic success that we're mostly hoping societal and environmental problems will be solved as a nice side effect. I suspect it's because we don't know how to keep the economic engine running if we take our eyes off the growth goal. I'm wondering if our prioritization is backwards from what it should be, at least in these times.

What do you think?

Postscript after the initial posting: here's one view (new URL) on some of the problems we face that could keep us productively busy.


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