Recessions can persist due to any of a variety of causes: the bursting of an overinflated economic bubble, overinvestment and business speculations that lead to a crash, criminal behavior that sours people's faith in the economy, the cloud of war and uncertainty that puts everything on hold — or, as is the case today, all of the above. But recoveries all begin from the same simple premise: growth. If the past 25 years have taught us anything, it is this one lesson: You cannot cut, outsource, or downsize your way to economic success; you have to grow. Growth, very simply, is the one business imperative. Which is why, in this issue of Fast Company, we're asking you to consider one profound business question: Is your company growing? To answer it, we're featuring two stories that together offer a smart and compelling way to think about growth: a strategic approach for larger, older companies, presented by Adrian Slywotzky and Richard Wise, and a fascinating case study from one of the most successful and youthful startups of today, Google.
For much of the 1990s, corporate age and size were looked upon with scorn. Big companies didn't have what it took to grow — or that was the conventional wisdom. But now, say Slywotzky and Wise in their cover essay, "Double-Digit Growth in No-Growth Times" (page 66), the tables have turned: Big companies have hidden assets that they can tap to kick-start growth — if their leaders are prepared to rethink their underlying ideas about growth. The old model was built on product innovation; the new model is built on demand innovation, a different way to grow that unlocks new opportunities and turns a company's size and tradition into huge benefits. That's good news for any big company today — most of which are struggling to grow.
And any smart startup (or ambitious midsize enterprise) can benefit from "How Google Grows . . . and Grows . . . and Grows" (page 74). In a world where most people associate the words "technology" and "startup" with "crash" and "burn," Google is a case study of growth and success. After all, here's a five-year-old company that has already turned into a verb: You can google almost anything or anybody and get an answer in 0.2 seconds. And as a search of Google will reveal, if you want to double your revenue from last year (as some estimate of Google), there are certain simple business principles — encompassing users, talent, relentless R&D, and, yes, failure — that even a geek can grasp.
At the heart of a drive to grow are three essential elements — factors that underlie any prescription for growth: optimism, innovation, and leadership. Recessions have a way of draining the most optimistic team, especially long, sustained periods of slow growth or no growth. But a simple look at history makes the case for optimism. In every period of American history, recessions have provided the springboard for the next great round of economic growth. More than half of the companies in the Dow Jones Industrial Average were started during a recession. Which is why the time to innovate is now. The companies that use this time to outthink, outperform, and out-innovate the competition will be the ones poised for even more rapid growth in the fuure. If you have any doubt about the ongoing importance of innovation, take a look at "The New IT Agenda" (page 53): Just as the naysayers are pronouncing the death of technology, business innovators are forging a path to the future.
Finally, the essential ingredient: leadership. It has always been true that leaders not only have to make decisions, but, even more important, they also have to make sense of a complex, confusing, fast-changing world. Today, that ability is at the top of their job description. Out of the jumble of incomplete facts and shreds of information, leaders assemble a clear and compelling vision of the future. They define a new order and a strong direction. They generate confidence and build momentum. In other words, leaders do the hard work that creates the conditions for growth. For readers of Fast Company, that's the real secret behind getting their company to grow.
A version of this article appeared in the April 2003 issue of Fast Company magazine.