Does growth doom a company?
What takes place with size that shifts perception of a company from delightful to dull? While scarce meant special, does big have to be banal?
I’d like to explore this challenge with you through a story…. about you.
A few years back you started a company. You make sugar confections. Toffee to be precise.
You offer the best tasting, highest quality, premium, hand-made toffee. Fresh made daily.
You have one store/kitchen in a revitalized factory district in Chicago. The reviews have been great, and sales, even better!
You and your 8 employees are proud.
(A little back story… Your first candy kitchen opened in a converted factory building in Chicago. The story goes the that this same factory inspired the fictitious munition factory run by Oliver “Daddy” Warbucks in the Little Orphan Annie Comic Strip. So you named your company: Oliver Warbucks Toffee Company – or Warbucks Toffee for short).
You run Warbucks Toffee based on Three Principles:
- Highest-Quality – fresh made, highest-quality ingredients,
- Consistency – every batch of toffee is made precisely to recipe, hand-stirred, small batches, no shortcuts, and every batch tasted to ensure quality,
- With Efficiency – like any smart business-person you avoid waste, your employees are careful with the ingredients, you have inventory delivered just-in-time.
[quality is key, all the time, but with efficiency]
Fast forward a few years… Warbucks Toffee is a huge success! You franchised the business and you’re up to 75 locations across the United States and Canada.
To keep up with demand – being such a labor intensive business and a few employees with minor sugar burns later – you’ve replaced hand-mixing at high-volume stores with high-tech mixers that heat and stir the toffee base to perfection! You’ve had to make things more efficient, nevertheless, visit after visit customers get their great tasting Warbucks Toffee.
You still live by your three principles.
You and your 800 employees are proud.
[quality is still tops, but size requires better efficiency]
Wow… what a ride! You’ve been open 10 years and Warbucks Toffee has gone global. Your success has been featured in the media. People drive around with Warbucks Toffee bumper stickers on their car, and you started a trend. Mom-and-pop toffee shops started opening a few years back offering “local toffee.”
You now support 723 locations with web-based confectioner and service training, secret shoppers (secret tasters, actually), and have ergonomically optimized the kitchen area for efficiency.
While individual store sales are a bit down, overall sales for the company still spells success!
Due to the high-volume and demand you’ve replaced the hand-wrapped, take-away packages of toffee that use to be made in-stores with pre-packaged boxes made in your central production and packaging facility. The plus is that now you have professional packaging that makes Warbucks Toffee great for gift giving.
In interviews about your upcoming book Warbucks Toffee: My Story of Sweet Success you still talk about quality, consistency and efficiency. But now – with the scale of the business – your focus is ensuring efficiency (to meet customer demand for speed and convenience) every time, at every location. You still offer a high-quality product, but demand has necessitated pre-packaging and automation.
You and your 8,000 employees are proud.
[at this stage, success = keeping things running smoothly
and ensuring a consistent experience at each location.
one could argue quality is "at the base" but it is no longer main focus]
If it weren’t for the images I’ve added to this story, you wouldn’t think twice about what I’ve presented. It sounds like all is going well. And technically, you’ve never abandoned your quality-promise.
However, when you can see how priorities shift over time, you realize how minor changes designed to maintain the business as it grows, can compromise what you intended to be.
Whether you’re a company growing with number of locations or a small shop expanding your products or services, the same shift takes place.
What should have been done different at Warbucks Toffee?
How can you keep your priorities properly stacked?
Once out of order is it possible to re-order them properly?
How can you avoid this situation? Or is it a problem at all?
Is the secret not to grow?
What do you think?
Why does every company want to go global and dominate the world? Why does everyone feel the need to create an empire out of their business? Some businesses in my opinion are better off as 1-offs and they can stay true to their product making sure every order is the best it can be and derive satisfaction it that.
Paul, there’s something to be said for intentional scarcity, mystique, and high profit margins. Being a local or regional brand isn’t such a bad thing sometimes.
Levon | Paul -
I agree with you both. Ways to fix getting big and ruining everything is… not to get big.
This means suppressing the push to grow simply because you can.
Scarcity = special… also, not going public is a way to get out of control.
(Are there any publicly traded companies [that have been public for a while] that haven’t grown themselves too big and ruined what they’re about?)
Thanks for your comments!
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