Course Overview

Virtually every organization considers growth a critical objective. But while almost universally desired, and much talked about, enterprise growth is quite poorly understood. Careful empirical studies show that very few enterprises grow profitably over sustained periods of time. Indeed, many organizations’ pursuit of growth is the very cause of their demise. When and how can companies grow profitably? This is the central issue examined in this course.

One of the primary objectives of the course is to get you to think strategically about growth. Growth involves a series of choices about rate (e.g. how fast to grow?), direction (scale vs. scope), and method of growth (e.g. organic vs. acquisition). A coherent set of choices regarding these elements constitutes a firm’s growth strategy and impacts whether it can grow profitably.

The course is organized into four modules.

Module 1: Introduction to the Concept of Growth Strategy—How Fast to Grow?
In the first module of the course, we introduce the basic growth strategy framework and focus on questions regarding the rate of growth: How fast should an organization grow? How can you tell if you are growing too fast (or too slow)? How can you determine the right rate of growth? What factors impede growth rates? What are the growth traps into which organizations can fall? A key theme in this module of the course is that growth is a dynamic process involving a balancing of market opportunities (demand) and organizational capabilities and resources (supply). Profitable growth requires getting this delicate balance right.

Module 2: Growth Through Scaling—The Challenges of Expanding Supply to Meet Demand
Growth in an existing line of business is one of the primary ways that organizations grow. This is particularly true for younger or smaller organizations in less mature industries. Typically, in these setting, market opportunities are not the constraint on growth, but instead tend to revolve around the organization’s capacity to scale. Very often, the very process of expanding the scale of the organization destroys the attributes (e.g. culture, operating system) that lead to the company’s success in the first place. In this module, we look at the challenges of increasing the scale of the organization while preserving distinguishing attributes of the company. A key theme in this part of the course is that growth almost inevitably requires changes in the organization itself, and that a key choice to be made is which elements of the organization should be preserved, and which should be changed.

Module 3: Growth Through Expanding Scope: Finding New Sources of Demand
Expanding the scope of the enterprise into new line of business (diversification) is the other common strategy for growth. In contrast to the organizations examined in Module 2, this module portrays organizations with ample resources and capabilities, but whose growth prospects are limited by lack of demand in primary markets. Their challenge is to find, if possible, new sources of revenue through entry into new markets. We will discuss the conditions under which scope expansion represent an attractive growth strategy.

Module 4: Growth Through Innovation and Transformation
Over the long-term, sustained growth often requires organizations to fundamentally evolve and transform their strategy, technology, business model, or organization. In this final module of the course, we examine the challenges of growth through transformation and seek to understand the reason some of these efforts succeed while other fail. We also explore the question whether there are ultimately limits to company growth.
The course will use a mixture of case studies drawn from a variety of contexts, including fast food, airlines, non-profits, luxury goods and services, rescue operations, life science, medical devices, software, professional services, manufacturing, and private aviation. We will also use readings to introduce the theoretical and conceptual foundations of the course.

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