Chuck Lucier and Jan Dyer

The development of valuable new businesses is the toughest challenge in business – far more difficult than sustaining an existing enterprise. Existing businesses benefit from inertia: customers won’t switch unless they are given a good reason, few employees leave voluntarily unless their compensation falls significantly below market rates, and returns on sunk investment may persist at substandard levels as long as a company can’t generate more cash by selling the assets. In contrast, rapid growth requires a dramatically superior value proposition that gives customers of other companies a reason to switch, sufficiently attractive compensation to attract large numbers of new employees, and returns on capital that draw new investors. Our own research shows that rapid growth typically requires a company to be about 20 percent better than would be required to sustain the business.

Like this content? Why not share it?
Share on FacebookTweet about this on TwitterShare on LinkedInBuffer this pagePin on PinterestShare on Redditshare on TumblrShare on StumbleUpon

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.