The existing growth paradigm of “More is better” does not work in a sustainable world. Organizations aiming to thrive as sustainable players need to rethink their growth strategy.

by Peter Matthies, Founder of the Conscious Business Institute

Is it possible to grow organizations without increasing their ecological footprint? Is growth necessary in the first place? Today’s growth paradigm of “More is better”, which is interwoven into our culture’s fabric, educational systems and daily behaviors, cannot sustain our world’s fast growing population. It is just a matter of time before we are hitting a wall.

Assessing our current business environment, the problem seems obvious: Companies who don’t grow stagnate – at least through the eyes of Wall Street. They are simply not interesting to the average investor. As a result they lose the direct competitive advantage provided by access to capital. Upon closer examination, however, the drivers for business growth are not that obvious. After all, it is every one of us that keeps Wall Street going. It’s our investment capital, our dollars that cast the vote.

In fact, most of today’s business and material growth is not driven by the belief that “More is Better”. It is driven by our anticipation what happens if growth is missing. In essence, our drive for growth is driven by the following 3 beliefs: I have to manipulate a future outcome (e.g. I have to make enough money so my business or I will be safe in the future), I have to manipulate what others think about me (e.g. I am buying a big car, or am building a powerful company so others think highly of me), and I have to avoid future pain (e.g. so I don’t need to do deal with all the nuisances of running short of money).

It is easy to see that each of these drivers does not only create environmental havoc; they also create stress and exhaustion, resulting in an unsustainable lifestyle. The “More is Better” concept is an element of what we call the model of Dominance & Subservience(TM), upon which most of today’s organizations are built (see previous blog about the Dominance & Sustainability model): we create an unsustainable environment in our attempt to dominate the resources that guarantee our survival, such as land, money, or other natural resources.

Remains the question: Is growth necessary – or even possible – in a sustainable world?

Growth is not only one of the 6 fundamental human needs (certainty, variety, significance, connection, growth, contribution), it is also one of the most naturally occurring phenomena in nature. Every plant and every creature goes through the phases of inception, growth, decay and annihilation. The problem we are facing is that although we are all excited about inception and growth, decay and annihilation scares our pants off. We keep relationships alive long after the love has gone. We keep our jobs long after they provide us with true inspiration and fulfillment. We keep companies afloat long after they have lost their mission. We push energy and expend resources to keep old structures alive, although many indicators signal that they are ready for a transformation – not necessarily death, but a transformation to a new growth phase.

Therefore, the question is not whether growth is necessary, but which growth is necessary? And is it possible to build “successful” organizations with this new growth paradigm?

To preempt an answer: In order to redefine growth in a sustainable world, we need to shift from money as a key measure to values and contribution. One example is Patagonia, one of the world’s leading models for sustainable business practices. Patagonia’s focus is not to maximize financial growth, but to maximize quality, the expression of its core values, and to contribute to a bigger purpose. Although competing in a tough market, Patagonia has become a movement rather than an ordinary business, a preferred provider of goods for a trusted customer base – financially successful, but growing in purpose and contribution.

This post originally appeared on JustMeans.

© 2009, Peter_Matthies. All rights reserved. Do not republish.

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Author: Peter_Matthies (1 Articles)

Peter Matthies has been involved in international technology and finance business for 17 years. He is the founder of the Conscious Business Institute, which assists business leaders in growing their companies in a more effective, inspiring and sustainable way. Before founding the Conscious Business Institute, Peter was a Principal for one of the world’s leading Private Equity and Venture Capital firms, Apax Partners & Co, and for b-business partners, a $ 1 billion pan-European VC fund. Peter served as president of the German Venture Capital Club and helped promote a corporate governance and financing environment based on integrity and mutual benefit. Peter started his career at Andersen Consulting in Germany. He later co-founded a systems integration and IT-consulting company, where he lead strategic IT and Internet projects for German corporations. Peter has published 2 books and over 100 articles on business, finance, leadership, martial arts, and technology. Peter is a global advisor and German Chair of the Climate Prosperity Alliance. Peter also serves as a global advisor and German Chair of the Climate Prosperity Alliance. To listen to a 30 minute radio interview about the Conscious Business Institute Approaches, please click here.

  • http://www.renaissance2.eu Dr Robin Wood

    You are spot on Peter- our obsession with growth is destroying our world. In my experience there are two fundamentals: firstly, those living conventional lifestyles in corporations, banks, governments and even NGO’s view budget growth as the means of enhancing their power and safeguarding their future. No surprise there. But secondly, and more importantly, most people I know in this conventional worldview are working to live rather than living to work- they are not following their passion, they are hoping that by sacrifricing their lives now they will gain future reward. This is the big lie many tell their children: do well at school, go to university, get a good job and you are set for life. Excuse me? Have they taken a look at the state of the world recently?

    So, we at Renaissance2 are focusing on the seven critical ingredients for a sustainable thriving civilization:

    Imagine yourself living in a world ….

    … powered by renewable energy……where people live and work in well designed, resilient environments…..in which enlightened enterprises deliver excellent, sustainable products and services….one where integral governance is provided by foresightful, healthy organizations and systems……..and conscious evolution powers a thriving global civilization in which a wise culture and human wellbeing are paramount.

    We have to do this one person, one organisation at a time, yet also “everybody all at once”. The phase transition of the great shift is happening right now, and we are are the catalysts!

  • http://www.kiwano.ca Sofia Ribeiro

    I believe it is possible to have both: sustainability AND growth (where growth = profits). Consumers nowadays are more critic of where they spend their money. They want to deal with businesses that are environmentally and socially-responsible.

    According to a recent report by the Conference Board of Canada, Generation Y will pay a premium for green, sustainable products, and will reward companies that reach them with dollars and word of mouth (while punishing those that don’t.).

    I believe that businesses that integrate environmental sustainability will actually improve their bottom line:

    – They tend to spend less money on inefficient programs

    – The company will become relevant to an entirely new customer segment: socially-conscious consumers

    – Employees tend to be more motivated when working with an ethical, sustainable business, becoming more efficient.

  • http://sustainableprogress.blogspot.com Daniel Hilson

    There is some great litrature on this topic. Check out “The Spirity Level” R. Wilkinson and K. Pickett, “Prosperity Without Growth: Economics for a Finite Planet” T. Jackson, and “Beyond Growth : The economics of sustainable development” H Daley.

    The reality is that there is no question academically that they are not compatible. We do not need growth and that growth is an illusion – we are only growing due to our rent free exploitation of natural resources. We do not need growth – and growth is not the answer to a more successful society. As is outlined in the Spirit level – to build a successful society with stronger institutions and community -we need a more equitable socieity. On almost every measure these are more successful societies.

    To define what we need we have to define success – and if success means the most people at all levels leading fulfilled lives and a sustainable planet – then growth is really not even an important part of the equation.

  • http://www.consciousbusinessinstitute.com Peter Matthies

    Thank you for your comments.
    Sofia, per your comment, Yvon Chouinard’s book “Let My People Go Surfing” comes to mind. Patagonia seems to be one of the leading examples that commitment to sustainability is a good business decision. As Chouinard stated in a speech at Stanford University: “Whenever we made “the right decision”, because it was the right decision to make, we made profits. There’s a direct link.”

    Daniel, thank you for the book suggestions and your conclusion that our our model of success is fundamentally flawed. Happens that I am working on a book with exactly that premise – and which provides a new model to succeed in our world.

    Best
    Peter

  • http://www.aberdeen.com Bill Lesieur

    I believe sustainability will drive major structural changes to industries, competitive markets and value chains; and change the way we do business around the world. I do believe we are entering a new era of sustainability innovation, which includes innovation of new business models, markets and ecosystem relationships. These dynamics seem likely to drive changes in the intersection of profitable growth pressures and sustainable businesses … the how and when is uncertain.

    Please help us build our foundational data for our sustainability research practice at Aberdeen Group by taking our survey:
    http://www.aberdeen.com/survey/6312sustainability2009/

    You will receive a copy of the report when the study is complete. Thanks.