Which is Worse for Entrepreneurs: Indigestion or Starvation?

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At the recent World Business Forum Event in New York City, business consultant and author Jim Collins said that "great enterprises are more likely to die of indigestion than starvation."

He further cited Packard's Law (which was named after Hewlett-Packard co-founder David Packard).  Packard's Law states the following: "No company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company. [And] If a company consistently grows revenue faster than its ability to get enough of the right people to implement that growth, it will not simply stagnate; it will fall."

So what does this really mean? It's better to execute on a small opportunity and do it right, then go after multiple and/or larger opportunities without the appropriate resources.

I tell this to entrepreneurs all the time. If you focus just on one thing, you can do an A+ job. But if you focus on 5 things, there's no way you can do above a B+ job on all of those things. And to be a successful entrepreneur, you need to put in an A+ effort.

Now, I'm not saying not to dream big. Because I want you to. But, you need to break your big dream into small pieces that you can execute on with the resources you currently have. As you accomplish each piece, you will gain more resources, making it easier to progress. (Note that I call these smaller pieces your "risk mitigating milestones" - I explain this more in this blog post - http://www.growthink.com/content/business-plan-milestones-how-they-are-essential-your-success).

Success rarely comes all at once. Rather it comes from continuously achieving small goals that are aligned with your big goal. So, make sure you have the right resources (particularly human resources), and create action plans to accomplish smaller goals that continually bring you closer to achieving your big goal. In other words, "think big, but act small!"

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Dan says

I have a small idea, it is for a gym towel. I have watched Dave's blog for a while now and he has great insights for small businesses like me. Thanks for the reminder that I don't need to get GE big overnight...check out my site if you like. gymbarrier.com
Posted at 10:16 am
Probal DasGupta says

"Instant success" is sometimes twenty years in the making. Your post rightly underscores the fact that excellence causes success, and that success doesn't just happen in a vacuum just because someone dreams big and works like crazy to grow the business. Dream big, but act small. Well said.
Posted at 10:53 am

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