October 11, 2006

Growth involves subtraction, not addition

Lao Tzu said:

β€œIn pursuit of knowledge, every day something is acquired; in pursuit of wisdom, every day something is dropped.”

Expansion – the pursuit of bigness – is a lot like the pursuit of knowledge. Growth, however, has more to do with acquiring wisdom.

What needs to be chipped away from companies such as GM, Ford or Sony for them to them uncover the little jewels of wisdom that can drive their movement forward?

Philips, the Dutch electronics conglomerate, is still a work in progress in this regard. But it may offer some clues: it the past 15 years it has pared itself down from 30 divisions to 4 and been willing to walk away from market share in industries where it no long made sense to be.

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