Rethinking growth

-  Lucinda Garthwaite & Daniel Sewell, CMP Founders and Lead Partners

 

Growth is almost everyone’s remedy for tight resources and lagging revenues.  For most, growth is an unmitigated good thing.  Growth brings sighs of relief.

It makes sense. Sustainability is the watchword for non-profit leaders and board members. In higher education, only 39% of college and university presidents are confident about their institutions’ survival in the next ten years[i].  We’ve heard it many times, sometimes with a desperate edge: We need to grow our programs! We’ve got to grow enrollment!

But growth as the strategy for institutional survival, even as a strategy for increasing impact, is becoming obsolete.  Many in the non-profit sector think instead in terms of scaling.  One writer describes the difference this way,

Growing means you are adding resources at the same rate that you’re adding revenue. This model occurs constantly in professional services business models – they gain a client, hire more people to service the client, and add revenue at the same exact rate at which they’ve added more costs. While they’ve technically “grown,” they have not scaled. On the other hand, scaling is about adding revenue at an exponential rate while only adding resources at an incremental rate.[ii]

In this sense, scaling is essentially about doing more with less.  Jeffrey Bradach, cofounder and managing partner of the Bridgespan Group, writes, “Today, there may be no idea with greater currency in the social sector than ‘scaling what works’.”  For a great discussion of scaling, we recommend his 2010 article in the Stanford Social Innovation Review.

There are good reasons to question growth as the principal strategy for assuring institutional viability and increasing impact.   Systems thinkers have long understood the dynamic of limits to growth or limits to success.  Organizations focus on growth, but eventually that growth itself creates problems, or limits.  Those limits might come in the form of staffing challenges, governance issues, other kinds of interpersonal and intra-organizational tensions and conflicts. Those dynamics end up draining organizational resources, so growth begins to limit the well-being and impact of the system.

Systems thinkers, and increasingly economists, offer another good reason to step back from the assumption that growth is the holy grail.  All systems are closed; they can’t keep getting bigger forever.  If you stop and think about it, this is a pretty common-sense concept.  Yet, at least in western cultures, we’ve built our social and economic systems on the assumption that growth is the thing to go for:  Growth = success.  No growth = failure.  Many systems thinkers and economists argue that’s gotten us into a heap of trouble.  A global and influential degrowth movement has begun, joined by political leaders; economists; business, education and nonprofit leaders; and activists around the world.

We believe that the implications for thinking beyond growth are exciting, promising new energy and potential for mission-driven organizations.  We’ll be exploring these ideas in future blog posts, especially in practical terms for leaders in non profits and higher education who seek new ways to assure the impact and viability of their mission.

 

[i] Inside Higher Ed. 2015 survey of college and university presidents,

[ii] https://www.fundable.com/blog/post/growth-vs-scaling