Growth Beyond the Start-Up

GrowthBeyond

Batten Bulletin: March, 2011

To pull together the material for Growing an Entrepreneurial Business: Concepts and Cases, Darden professor and Batten Executive-in-Residence Ed Hess drew on his research and teaching experience and his earlier work as a lawyer, investment banker, strategy consultant, and participant, as a boy, in his family’s clothing retail business. The result is a textbook that offers a rich variety of both theory and practice, through 33 teaching cases and discussions of the many challenges of growing an enterprise beyond the start-up phase.

Few topics have received as much attention in the business press as growth, but Hess’s volume, published in 2011 by Stanford University Press, is the only case textbook in print that deals with the growth of entrepreneurial businesses beyond the start-up phase. It fills the niche that was occupied by a textbook with cases, now out of print, coauthored by Jim Collins in 1995.

Hess designed Growing an Entrepreneurial Business to be used in undergraduate and MBA courses devoted to growing and managing small businesses, as a module in advanced entrepreneurship courses, and as a reference for entrepreneurs considering their own growth options. Most of the cases and accompanying discussion questions, and all of the theories, have been tested by Hess in his Darden MBA class “Management of Smaller Enterprises.”

Growing an Entrepreneurial Business is informed by Hess’s view of corporate growth not as a given but as an option that must be carefully weighed. In his book Smart Growth (Columbia University Press, 2010), Hess rebuts the “grow or die” mentality that has long dominated corporate boardrooms, Wall Street, the business press, and MBA classrooms. A successful company, the thinking goes, is one that grows without interruption, as evidenced by ever increasing quarterly earnings. But as Hess writes in the opening chapter of the textbook, and argues in Smart Growth, “An examination of how businesses actually grow shows us that continuous, smooth, linear growth is the exception rather than the rule and that growth actually can bring about significant problems for the company…growth is a dynamic, interactive interdependent process that generally involves false starts, learning as you go, adaptation, and failed initiatives. Growth is messy.”

The rest of the textbook builds on that premise, offering a wide variety of materials to help students appreciate the messiness of growth and entrepreneurs to confront it. Topics include the risks of growth, the notion of growth as a system, planning and execution, the evolution of the entrepreneur, building an effective management team, cultural issues, and managing a family business.

“Growth is a holistic management process,” Hess says, so a textbook on the subject covers broad territory, drawing from many disciplines. For fourth-quarter MBA students, he notes, this material is especially “unifying and integrative,” a culmination of the principles they’ve encountered across their studies.

Hess, who has written nine books, more than 50 practitioner-oriented articles, and more than 48 Darden teaching cases, organized the textbook for flexibility and usability. Instructors, he notes, can pick and choose among topics and cases, some of which call on students to grapple with a specific conundrum, in the manner of a traditional MBA case, and others that are open-ended narratives containing multiple teaching points. Instructors can use the comprehensive “subject matrix,” which presents the topics covered in each case, to guide their selections. And students and entrepreneurs, he hopes, will also find many practical elements in the book, such as checklists and other tools for understanding and managing growth.

 

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