Friday, July 3, 2009


In the troubled company world, we often speak of the errors of growth. We have seen them all around and usually they are more obvious to the casual observer than the analyst. For example, look at Starbucks. Who hadn't remarked that there was a Starbucks seemingly on every corner. While that was an overstatement, in some cities it seemed like fact. It was obvious that each new Starbucks at some point, was taking market share from an existing Starbucks.

Since I am in England today, it seems appropriate to comment on an error of growth in London. It has occurred to none other than Gordon Ramsey. By his own admission, he grew too much too quickly. He has closed restaurants, let staff go, borrowed more money (4 million pounds this year alone), put some of his own money into the company, put some of his father-in-law's money into the company, and he even had to sell his Ferrari.

Leaders grow their companies in a measured secure manner. They make sure their capital structure provides them with the ability to withstand downturns and competitive pressures. They don't stretch themselves to the max.

Leaders take care of the downside. They know the upside takes care of itself.

Cheers, Mike

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