What Is Sustainable Growth in Business?
There are many facets to sustainable growth for businesses, from social and environmental responsibility to operational efficiency. Companies like PepsiCo have focused on environmental sustainability while others like Nike went the social route with the Colin Kaepernick campaign.
These businesses realized they would need to change or take a stand on messages important to the world and their audiences. In the following article, we offer deeper insight into just what sustainable growth is. Let’s begin!
Sustainable Growth Is Realistic
Growth, in general, is considered a good thing. In business circles, however, it’s not always the best thing for a company.
Some companies get top-heavy, so to speak. They try growing too much too quickly. As a result, they take on so much that they don’t have the resources to sustain other vital elements of the business.
One example of an unhealthy sustainable growth rate is a company that’s selling a lot faster than it can produce inventory. In these cases, they risk angering a lot of people and causing negative word-of-mouth to spread like wildfire.
Uses Strategy
Sustainable economic growth is a term most often connected to how governments manage their economies. For example, the Social Security program in the US became nonsustainable in its current form when trends shifted against child-rearing.
The system depends on future retirees paying for current retirees. If there are fewer of them, wages stagnate, and student loans spiral out of control, then they are going to have a tougher time paying for a larger group of people who are living longer than ever before.
Companies see in this a cautionary tale. Using the example as something not to do, a responsible company would not adopt expenses at a faster rate than revenue is expected to grow.
Manages Resources
Business growth and sustainability rely on you growing as much as you can with the resources you have available. You don’t simply grow for growth’s sake. You also do not channel resources meant for a more pressing need onto something that can wait.
Keeps the Future in the Present
Responsible sustainable growth and development mean making present-based decisions with the future in mind. You think about the company you’re going to leave to future generations when you retire.
This is what keeps the company afloat, the workforce strong, and any company-sponsored pensions or retirement plans sound. By acting in the present with an eye to the future, you and future generations have skin in the game.
Builds Community
Sustainable growth in business is about fostering new relationships and nurturing your existing ones. The only way you can keep your business going is through your clients and customers. Seeing that they succeed is how you put your company in the best position for reciprocation.
Optimizes Operational Efficiency
Sustainable growth relies on continuous improvement solutions to ensure the processes implemented are as efficient as possible. Applied across the organization, it means not wasting time, energy, and talent on things that you can automate or outsource.
Make Sustainable Growth Priority for Your Organization
Achieving sustainable growth in any organization is a balancing act between what you can realistically do and what you’ll need to accomplish to move ahead. It’s about resource management, strategy, and never leave your customers or employees behind.
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