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MIT Prof: Businesses of the Future Will Survive Without Growing

It's taken as a natural law of enterprise, absorbed through countless MBA case studies and credit card commercials: you must "grow your business."...


It's taken as a natural law of enterprise, absorbed through countless MBA case studies and credit card commercials: you must "grow your business." That means that over time your company needs to employ more people, produce more product, and, inevitably, use more of the planet's resources. Otherwise you perish.Jay Forrester, the inventor or RAM, "father of system dynamics," and professor emeritus at MIT's Sloan School of Business, disagrees. He thinks the way forward for business is figuring out how not to grow:"I think one of the biggest management problems is going to be to understand how to manage a successful non-growing company-and how to get out of the frame of mind that success is measured only by growth. ... It's very common to say, "If you stagnate, if you don't grow, you will fail." Well, that's possible if you don't maintain a system with proper management policies. You've still got to have some way to maintain vitality, to maintain some product progress, but to do it within a fixed demand on the environment. I don't think I've heard of that being taught in management schools." Indeed. The idea of a no-growth business doesn't seem to get discussed much anywhere yet. It's great when companies buy carbon offsets or incorporate post-consumer recycled content into their products-every little bit helps-but we generally ignore the fact that there's something inherently unsustainable about any business that has to get bigger to stay alive.Read the entire interview with Jay Forrester here. Businesses of all stripes are putting out fires right now, but let's hope the case for the non-growing company gets a fair hearing soon.Image credit.
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