Traditional company growth models are becoming obsolete due to the digital revolution. Instead of a linear process, growth now follows a network model, where the importance lies in the quality of interactions and relationships. The key is to create value by facilitating connections and fostering collaboration, not just increasing the number of employees or customers.
Transactional costs, once the main barrier to growth, have significantly decreased with digital technology. This allows smaller, more agile companies to compete with larger ones. However, these smaller companies face the challenge of managing complex networks of relationships, as traditional management practices are ill-equipped to handle them.
The concept of ‘creative friction’ is introduced, where diversity and conflict are seen as catalysts for innovation and learning. This contrasts with traditional views of conflict as detrimental to productivity. Organisations need to foster an environment where different ideas and perspectives can clash and create new solutions.
In essence, growth is no longer about size or scale but about the depth and quality of relationships. Companies need to adapt their growth strategies to this new reality, focusing on building networks, managing complexity, and fostering creative friction. This requires a fundamental shift in mindset, from seeing companies as machines to seeing them as complex, living systems.
Go to source article: http://eskokilpi.blogging.fi/2014/01/27/why-companies-dont-grow/