Not All Business Growth is Good

Growth is the lifeblood of any business, but not all growth is created equal. In fact, certain types of growth can act like a poison, accelerating a company toward failure rather than success. Whether you’re a startup founder chasing market share or a seasoned executive navigating scaling challenges, it’s critical to approach growth with intention and discipline.

During my career, I’ve learned that growth without guardrails creates havoc on a business. One lesson, in particular, stands out. A corporate board member once shared with me a piece of wisdom during a period when our company was facing severe growing pains:

“Never grow faster than your ability to manage it. Uncontrollable, unscalable growth has killed far more companies than competition ever will.”

This insight underscores the essence of what I call the Performance Mindset Rules of Growth—three principles designed to ensure your growth is sustainable, scalable, and beneficial to your business. Let’s break them down.

Rule 1: Your Growth Must Be Sustainable and Scalable

Too often, businesses experience what I call a “sugar high” of growth—short-term bursts of revenue that are unsustainable in the long run. These temporary wins might come from chasing the wrong customers or overspending on advertising & marketing to impulsively react to market trends.

How to Evaluate:

• Sustainability: Are the new customers you’re attracting aligned with your long-term strategy? Are they profitable? Are you building relationships that will endure over time that can grow your customer LTV (lifetime value)?
• Scalability: Can your existing processes, infrastructure, and team handle accelerated growth, or are you constantly firefighting to keep up?

If the answer is “no” to either of these questions, it’s time to reassess. Growth that can’t be sustained or scaled becomes a liability rather than an asset.

Rule 2: Your Growth Needs to Generate Greater Operating Leverage

True growth isn’t just about doing more—it’s about doing more with less. The best growth creates operating leverage, where your business generates greater output with little or no increase in input. This means scaling revenue, impact, or efficiency without a proportional rise in costs, resources, or effort.

Think of it this way: If every dollar of revenue you generate requires a matching dollar in expenses—or worse, more—you’re not scaling; you’re treading water. Worse, growth without operating leverage can exhaust your team and drain your resources, leaving you vulnerable to competition or market shifts.

How to Evaluate:

• Efficiency Gains: Are you leveraging systems, technology, or process improvements to produce more with the same level of effort?
• Team Impact: Are your people able to focus on higher-value work as you grow, or is growth leading to burnout and inefficiency?
• Margin Expansion: Does each new layer of growth improve your profitability, or are costs ballooning just to keep up?

When growth creates operating leverage, your business becomes stronger, more resilient, and better positioned for the future. If it doesn’t, it’s time to reconsider whether that growth is worth pursuing.

Rule 3: You Must Be Able to Maintain or Improve Your Execution

At its core, business success is about execution. Growth should never come at the cost of your team’s ability to deliver on your promises. Unfortunately, many companies sacrifice quality, customer experience, or operational excellence in the pursuit of rapid expansion.

Questions to Ask:

• Is your team maintaining its ability to execute at a high level?
• Are your customers experiencing the same—or better—service and value as you grow?
• Do you have systems in place to catch and correct execution gaps before they become systemic?

When execution falters, growth quickly turns into churn, with dissatisfied customers and overwhelmed employees undoing any gains.

The Lesson: Growth Without Control is Dangerous

The story from that corporate boardroom has stayed with me because it’s a reminder of how dangerous uncontrolled growth can be. It’s easy to get caught up in the excitement of new revenue or market expansion, but if you don’t have the systems, processes, and leadership to manage it, that growth can quickly spiral out of control.

Remember: competition is rarely the primary cause of business failure. Far more companies are brought down by their inability to manage the growth they chased so eagerly.

Putting It All Together

Before chasing the next wave of growth, take a step back and apply the Performance Mindset Rules of Growth:

1. Sustainability and Scalability: Ensure your growth isn’t just a sugar high.
2. Operating Leverage: Use growth to strengthen your business, not weaken it.
3. Execution Excellence: Protect and enhance your ability to deliver at a high level.

Growth is exciting, but it’s also a responsibility. Done right, it can transform your business. Done wrong, it can lead to collapse. The choice is yours—grow wisely.