“Growth does not mean size!”
This is the kind of comment that you might expect from a new economics, or a new age group, but you probably would not expect to hear it from a major multinational. Yet that was how the new CEO of Suez Environment, a major global water and waste organisation, opened his announcement of the company’s 2030 Vision. He was referring to physical size for he went on to speak of reducing capital (physical structures) and increasing IT, of focusing not on ‘growth’ as such, but on selecting just those areas in which they could add most value. In other words, to grow performance and profit. And yes, profit is a ‘good thing’, if it is a reflection of good performance.
I have a feeling we are about to see more of this kind of growth take place from now on. We can contrast this approach to the older approach where companies seek to grow simply by amalgamations and mergers. In the recent past, there has been a lot of this ‘growth’ but it really isn’t growth at all, because nothing has been added by the merger (despite claims to the contrary). It is just a re-packaging of what already exists. This has been particularly prevalent in engineering and consulting, and yes, also in asset management, companies. Yet it seems that every time a merger occurs, not only do we add more ‘administrative’ levels (i.e. more cost) but many of those employees who are most able and innovative, leave the mega businesses and set up their own businesses as small, more flexible, more imaginative units – and thrive.
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