June 10, 2005
Sustainable Growth
Posted by Kevin | Print This Article
This happened several years ago. I was working for the trucking industry.
I was new to associations — in fact, I was new to pretty much everything. I take a day and spend it visiting a member — the owner of a mid-sized trucking company. Not one of the largest companies, or well-known. But not one of the smallest, either. And a highly profitable company in an industry otherwise known for its low margins.
We talk about a lot of things: How he started the business with one used truck. How he created career paths to give truck drivers a goal to strive for and reach. His personal passions (cars and golf).
Then he mentions that his company’s goal for this year is to achieve 3% growth. In fact, his goal every year is 3 - 5% growth. I ask how he came up with that number. (I think, but don’t say, that it seems kind of small.)
He replies: "There are plenty of ways to grow quicker, faster. Always some way to bump up market share, or bring in some fast money. And I’ve seen lots of companies do it.
"But it seems like they always live to regret it. Fast money doesn’t necessarily mean more profit. It usually means less. A growth in market can stretch your resources to the limit until you wind up snapping back like a rubber band.
"And if you have a sudden growth spurt one year, all too often you find it’s not sustainable. The next year you grow a lot less — or decline.
"We aim for 3% growth — profitable growth — because I’m pretty sure we can hit it each year. And it’s vital to grow, at least a little, each year. Because it’s important for my employees to feel like they are part of a growing company."
It happened several years ago. I’ve always remembered it.
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