HBR's 10 Must Reads on Organizational Resilience (with bonus article "Organizational Grit" by Thomas H. Lee and Angela L. Duckworth)

Reigniting Growth

by Chris Zook and James Allen

MOST SUCCESSFUL COMPANIES EVENTUALLY FACE a predictable crisis that we call stall-out—a sudden large drop in revenue and profit growth or a collapse of once high shareholder returns to well below the cost of capital. Stall-out occurs when the growth engine that powered a company to success stops working. This rarely happens because the business model has suddenly become obsolete—a common misconception. Rather, our research shows that the business has almost always become too complex, most often owing to bureaucracy that slows the company’s metabolism, or internal dysfunction that distorts information and hampers managers’ ability to make rapid decisions and take swift action on them. When we talk ...