Almost every time somebody mentions growth in business context, they mean increasing the number of employees. Why?
It seems to be a pretty arbitrary dimension, especially taking into account that headcount isn’t the primary purpose of business. Making money is (at least in for-profits)!
There are big downsides of growing headcount:
- You have to pay more in salaries
- You get less efficient
- You need more coordination
- The company gets (more) hierarchical, with people at the bottom getting further from the vision, and managers on the top further from the actual work getting done.
- You have more work in progress (which is bad) and it’s harder to change direction
There are other ways to improve the business that are less prominent:
- Improve efficiency
- Increase focus: drop your worst customers and products.
- Make people that already work for the company more happy, efficient and loyal.