The Growth Gamble

About the Authors

Andrew Campbell is a director of the Ashridge Strategic Management Centre and a consultant for major corporate clients. He is also a visiting professor at City University and was previously a fellow in the Centre for Business Strategy at the London Business School. His extensive experience and research in strategic management have made him a respected voice in the field.

Robert Park has 25 years of experience in the British banking sector, with the last 12 years spent at the NatWest Group as head of group strategy. He is a consultant and an associate of the Ashridge Strategic Management Centre. His practical experience in strategy and management adds a valuable dimension to his academic and consulting work.

Main Idea

The central thesis of The Growth Gamble is that while conventional business wisdom promotes relentless growth, not all companies are equipped to handle rapid expansion. Andrew Campbell and Robert Park argue that some companies are better suited for slow and steady growth due to factors like market instability, competitive intensity, and infrastructural limitations. They introduce the New Businesses Traffic Lights Toolkit to help businesses make informed decisions about growth opportunities and avoid costly mistakes.

Table of Contents

• The Challenge of New Businesses
• Beating the Odds
• Six Rules for New Businesses
• The Case for Low Growth
• New Businesses Traffic Lights
• New Businesses, Right Processes
• Positioning and Supporting a New Business

The Challenge of New Businesses

The journey of expanding into new business territories is fraught with challenges, as illustrated by the experiences of companies like Intel and McDonald's. Both companies attempted to diversify beyond their core businesses, with mixed results.

"Intel struggled with businesses that had different rules that depended on insights about the future." - Andrew Campbell and Robert Park

Intel's core business of microprocessors grew rapidly, but its ventures into new areas like motherboards and video conferencing faced challenges due to the differing business models and managerial requirements. Similarly, McDonald's attempted to diversify by acquiring businesses like Chipotle and Boston Market but found that these new ventures often did not align well with their core strengths.

The failures were not due to a lack of effort but rather a misalignment between the new business models and the companies' established managerial practices and organizational culture. This misalignment often resulted in weak follow-through and ultimately led to the abandonment of these ventures.