SMART GROWTH: Building an Enduring Business by Managing the Risks of Growth

Edward D. Hess

(Columbia Business School Publishing, 2012)

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Wall Street believes that all public companies should grow smoothly and continuously, as evidenced by ever-increasing quarterly earnings, and that all companies either “grow or die.” Introducing a research-based growth model called “Smart Growth,” Edward D. Hess challenges this ethos and its dangerous mentality, which often deters real growth and pressures businesses to create, manufacture, and purchase noncore earnings just to appease Wall Street.

Smart Growth accounts for the complexity of growth from the perspective of organization, process, change, leadership, cognition, risk management, employee engagement, and human dynamics. Authentic growth is much more than a strategy or a desired result. It is a process characterized by complex change, entrepreneurial action, experimental learning, and the management of risk. Hess draws on extensive public and private company research, incorporating case studies of Best Buy, Sysco, UPS, Costco, Starbucks, McDonalds, Coca Cola, Room & Board, Home Depot, Tiffany & Company, P&G, and Jet Blue. With conceptual innovations such as an Authentic Earnings and a Growth System framework, a seven-step growth funnel pipeline, a Growth Decision Template, and a Growth Risks Audit, Hess provides a blueprint for building an enduring business that strives to be better, rather than simply bigger.



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” Smart Growth will bend your mind, challenge your assumptions, and set you on a new growth trajectory. If you want to understand how following advice from Wall Street can doom you to destruction, read this book.” 

— Richard D’Aveni
Tuck School of Business at Dartmouth College, and author of Hypercompetition and Beating the Commodity Trap: How to Maximize Your Competitive Position and Increase Your Pricing Power

“Hess offers the reader a thoughtful critique of the assumptions underlying the prevailing logic for the growth imperative that is so widely accepted.” 

— Robert K. Kazanjian
Goizueta Business School, Emory University, and coeditor of The Search for Organic Growth

“Hess provides insight as well as prescriptions for how to lead effectively and how to grow intelligently.” 

— Kim Cameron
Ross School of Business and the School of Education, University of Michigan, and author of Positive Leadership: Strategies for Extraordinary Performance

“Hess takes dead aim at one of the sacred shibboleths of business& mdash;the notion that companies must ‘grow or die’& mdash;and scores a bull’s-eye. He makes a devastating case and demonstrates how destructive the blind pursuit of growth can be, and has been, to businesses of all types, especially publicly-owned ones. Along the way, Hess maps an alternative approach to managing business growth that focuses on the long-term health of the enterprise. It’s a powerful argument and one that should be taken to heart by corporate executives, entrepreneurs, and policymakers alike.”

— Bo Burlingham
editor-at-large of Inc. magazine and author of Small Giants: Companies That Choose To Be Great Instead of Big

“Hess’s insight and research provide a navigational path that illuminates key success factors and models that drive exponential growth.” 

— Jeffrey S. Shuman
Harris Corporation

“In this masterful work, Edward D. Hess shows us how companies can grow in a healthy and organic manner, one that is sustainable and beneficial for all stakeholders, including society as a whole.”

— Raj Sisodia
Bentley University, and coauthor of Firms of Endearment: How World Class Companies Profit from Passion and Purpose

“This book will challenge your basic assumptions about business and growth. It needs to be read and talked about in both companies and business schools.” 

— R. Edward Freeman
Darden Business School, and coauthor of Managing for Stakeholders: Survival, Reputation, and Success

“Warning against the creeping corruption of ‘managed earnings’ and ‘making the numbers,’ Edward D. Hess wisely urges business manager-leaders to keep their focus on the real growth of getting better, not bigger, and creating true value, not short-term earnings per share.” 

— Charles Ellis
author of Winning the Loser’s Game: Timeless Strategies for Successful Investing

” Smart Growth is a provocative and useful evidence-based approach to understanding the principles of corporate growth.”

— Mary Ann Glynn
Boston College