Expansion Isn’t Growth

There seems to be a silly trend where companies equate expansion with growth, so they put all their eggs in an expansion basket and assume that pride and quality control will follow. But that rarely happens. What does happen is that infrastructure strains under the weight of expansion demands until those demands finally out-pace quality control and then word-of-mouth starts tolling death knells.

This common tale is simple: we prioritize expansion over quality and end up with neither.

“But David, you have to have both quality and expansion.” comes the common objection. Sure, I probably agree with that. But the fact of the matter is that quality doesn’t lend itself to expansion and expansion doesn’t lend itself to quality. So you have to make an intentional decision to prioritize one over the other. All I’m saying is that if you prioritize quality over expansion, you’ll have a better shot at expansion than if you prioritize expansion over quality.

But the point to be made here is that expansion, by itself, is not growth. Expansion is part of growth (and an essential one, at that), but it isn’t the whole of growth.

Some friends of mine started a hydroponics farm and are cranking out tons (literally) of tomatoes. Speaking as a guy who doesn’t particularly care for tomatoes, I must say that they’re truly extraordinary tomatoes. With their success in growing quality, organic tomatoes, the next step is to grow as a business. But if we equate “growing” as “expansion”, they’ll end up installing more and more beds of tomatoes without regard to the quality of the tomatoes. That would be a tragic mistake for a start-up company like theirs. What will make their business boom is if they can consistently deliver the same, great-tasting, quality product. That way their product can live up to their marketing copy and word-of-mouth can carry it to the masses.

Yes, there’s a lot of temptation for companies to expand and that works out for investors who make their money on hockey-stick revenue. But it doesn’t work out for the business owner who will lose everything when the bubble bursts. We have seen this over and over again. So eventually, every small-business owner has to decide if they want longevity or boom-then-bust. Do they want to be a candle or a firework? If they want the former, then they have to decide –and communicate– that expansion, by itself, isn’t growth. If you want to grow, you have to expand your quality. Both together.