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Most companies want to get bigger and bigger. John Abrams’ is one that doesn’t – and prospers.
It’s a cherished business doctrine that companies must grow or perish. But at South Mountain Company – a 29-year-old, $6million (£3.1m) architectural and construction firm on Martha’s Vineyard in Massachusetts – we don’t believe it. We used to respond directly to demand. We accepted whatever work was offered and expanded capacity when needed. But over time we sometimes noticed negative effects of growth and began to question our approach. We still have more opportunities for work than we can handle, but don’t accept them all. We expand with thoughtfulness and deliberation. One reason that’s possible is that we’re employee-owned. The company’s owners and decision-makers are also the people doing the work, which has made us, I suppose, business heretics.
We think about ‘enough’ rather than ‘more’ – enough profits, enough compensation, enough health and well-being, enough time to do the work properly, enough to manage, enough headaches, enough screw-ups. We didn’t always take this approach. The first time we questioned the growth mantra was in 1994, in the middle of our most tumultuous year. We had taken on several large projects, doubled our revenues and added employees. The company was stressed out. There seemed to be a general sense we had grown too much, too fast.
We decided to measure the degree of concern. At a company meeting we hung a sheet of paper on the wall with a heavy horizontal line and an arrow at each end. The left end said, ‘Decrease size to 1990 level’. The right end said ‘Continue slow growth’. In the middle, a vertical line said ‘Maintain present size’. Each person was given a sticky dot to place somewhere along that continuum. When we stood back to look, we found most dots were just to the right of the line. Nobody had put a dot to the left. This was the group will: we should back off the accelerator a little, adjust to our recent growth, err toward caution, slow down a bit.
For the last decade we’ve pursued growth at a snail’s pace. Last year, however, a new consensus emerged: we agreed we had reached optimum size for now and should direct any new growth only to internal efficiencies (like doing more with less). In short, we believe that we are better off small.
Is this a conservative position? Yes, because it holds onto what works and avoids risk. But isn’t it also radical? I think so. Foregoing opportunities for growth means employees of this company have chosen to value the quality of their work life over the size of the potential compensation that might have come with more growth.
It’s a cherished business doctrine that companies must grow or perish. But at South Mountain Company – a 29-year-old, $6million (£3.1m) architectural and construction firm on Martha’s Vineyard in Massachusetts – we don’t believe it. We used to respond directly to demand. We accepted whatever work was offered and expanded capacity when needed. But over time we sometimes noticed negative effects of growth and began to question our approach. We still have more opportunities for work than we can handle, but don’t accept them all. We expand with thoughtfulness and deliberation. One reason that’s possible is that we’re employee-owned. The company’s owners and decision-makers are also the people doing the work, which has made us, I suppose, business heretics.
We think about ‘enough’ rather than ‘more’ – enough profits, enough compensation, enough health and well-being, enough time to do the work properly, enough to manage, enough headaches, enough screw-ups. We didn’t always take this approach. The first time we questioned the growth mantra was in 1994, in the middle of our most tumultuous year. We had taken on several large projects, doubled our revenues and added employees. The company was stressed out. There seemed to be a general sense we had grown too much, too fast.
We decided to measure the degree of concern. At a company meeting we hung a sheet of paper on the wall with a heavy horizontal line and an arrow at each end. The left end said, ‘Decrease size to 1990 level’. The right end said ‘Continue slow growth’. In the middle, a vertical line said ‘Maintain present size’. Each person was given a sticky dot to place somewhere along that continuum. When we stood back to look, we found most dots were just to the right of the line. Nobody had put a dot to the left. This was the group will: we should back off the accelerator a little, adjust to our recent growth, err toward caution, slow down a bit.
For the last decade we’ve pursued growth at a snail’s pace. Last year, however, a new consensus emerged: we agreed we had reached optimum size for now and should direct any new growth only to internal efficiencies (like doing more with less). In short, we believe that we are better off small.
Is this a conservative position? Yes, because it holds onto what works and avoids risk. But isn’t it also radical? I think so. Foregoing opportunities for growth means employees of this company have chosen to value the quality of their work life over the size of the potential compensation that might have come with more growth.
John Abrams is founder and president, South Mountain Company Inc.
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