Profitable growth: from aspiration to rigor
- 6 days ago
- 3 min read
“We want to grow.” Few phrases generate such broad consensus on a board of directors.
The aspiration is legitimate: growth means gaining relevance, motivating teams, and seizing opportunities. But growth isn’t always synonymous with creating value. Many companies manage to increase their sales, but they do so by sacrificing margins, overinvesting, or spreading their efforts too thin.
Statistics are compelling: only 2 out of every 10 companies manage to combine sustained growth with above-average profitability. In other words, most companies grow at some point, but they do not do so profitably or consistently. Healthy growth is not the norm. It is the exception.
In a context like that of Chile and Latin America—volatile, competitive, and with squeezed margins—discipline in growth becomes even more critical.
Growth without profitability is not growth
When the pressure to deliver results intensifies, the first reaction is often to push volume. Discounts are offered, contracts are signed with low-margin customers, and new product lines are launched in a rush. Revenue rises, but EBITDA erodes.
PwC has found that 80% of C-level executives today prioritize profitable growth over gaining market share. The reason is simple: growing with negative margins is unsustainable. A high-revenue contract that undermines profitability is a Pyrrhic victory. The discipline lies in distinguishing between growing sales and growing value.
Choose a few focus areas, execute them rigorously
Companies that achieve sustained growth don’t try to do everything. They select a few focus areas—a category, a geographic region, a customer segment—and concentrate their capabilities there. Harvard Business Review reports that companies that focus their efforts on a few areas grow 30% faster than those that spread their resources across too many initiatives.
The counterintuitive part is that by scaling back short-term ambition, you gain speed of execution and clarity of direction. First, you master what you’ve chosen; then you expand. The trap lies in trying to cover everything too soon.
Defensive growth and offensive growth
Not all growth is the same. Defensive growth seeks to protect what already exists: retaining key customers, maintaining pricing, and gaining efficiency. Offensive growth focuses on the new: conquering markets, launching products, and entering new segments.
A common mistake is to confuse these two approaches. A defensive strategy requires operational discipline; an offensive one requires investment in innovation and distinct capabilities. Mixing the two leads to plans that promise too much and deliver too little.
The most effective leaders are able to balance both types of growth, knowing when to defend and when to attack.
Execution as a competitive advantage
Discipline in execution is what turns a growth plan into reality. BCG has shown that companies with clear governance and strict accountability are three times more likely to sustain their growth over time.
Each growth vector needs a named “owner,” progress metrics, and regular reviews. It’s not about flooding the organization with OKRs, but about ensuring that what has been defined as a priority receives focus, resources, and follow-up.
Rigorous execution is what separates an inspiring strategy from real transformation.
Growing without losing the business' soul
One of the risks of rapid growth is diluting what made the company unique. In the rush to expand, the clarity of the value proposition is lost, the customer experience deteriorates, or the internal culture erodes.
Profitable growth requires not only managing finances carefully but also preserving what sustains the trust of customers and employees.
Ultimately, what makes growth sustainable is not just profitability, but the alignment between what the company promises and what it actually delivers.
The main question
Profitable growth isn’t achieved with slogans or generic plans. It’s achieved through discipline: choosing a few key areas, balancing defense and offense, executing with focus, and protecting the company’s essence.
The question every C-level executive should ask is:
Are we chasing volume just to show numbers, or are we building sustainable value?
Because in a volatile environment, what sets those who move forward apart from those who stagnate is not their ambition, but their ability to transform that ambition into a system of profitable growth.
About the author
Ricardo Sonneborn is a partner at SummaPartners and has more than 20 years of experience in strategic consulting and corporate finance.