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As professional managers, we are obsessed with some concepts like high growth, scaling up and high market share. However, these topics when pursued without understanding their true meaning can result in a financial disaster for the company.

Our Obsessions

Businesses all over the world are obsessed with achieving market leadership, building scale to achieve economies of scale and last but not the least, consistently clocking high growth rate. However, the obsession of businesses with the above objectives invariably lands them in trouble. In fact some say that our obsessions with these is what is at the bottom of what all is wrong with organizations. Why? Primarily because they have not only misunderstood the concept behind these objectives but also how these objectives should be achieved. As such, Avinash Narula feels that there is a strong need to understand what our obsessions mean as well as their pros and cons so that we can avoid the pitfalls and run our businesses successfully.

So, when we talk of market leadership, it should be in context of the served market. Also, you have to earn the high market share and not buy it.

It also seems that most people are obsessed with building scale because they think that price is the only factor that matters and that you can only bring down by taking advantage of the economies of scale. Avinash finds this very illogical for a variety of reasons. How does one justify existence of profitable niche players or who knows what is the optimum level of scale and finally what about the disadvantages of scale?

Add to above. Our desire to not only grow and build up scale but we also want to do it fast, almost overnight. However, growth is the by-product of doing things right. But by itself, it is not a worthy goal. Also, Growth purely by acquisitions is growth for growth sake and it is not only expensive but usually lands companies in trouble.

What adds further to the problem is we try to make our obsessions come true through artificial means rather than through prudent management practices and decisions.

For instance, we all know that we cannot force growth. All we can do is take the right actions and hope for the best results. So Avinash will convince you to stop worrying about being number 1 or building scale fast or achieving high growth rate, and just keep taking the right decisions to develop your business at a steady pace. You can save yourself a lot of trouble by taking his advice.