In today’s fast-paced world, rapid growth is often seen as a sign of success. However, not all growth can be maintained, and there are clear indicators that can signal an organization is growing at an unsustainable rate.
When leaders notice things like a dip in customer satisfaction, employee burnout and decreased quality of work, they must take proactive measures to correct the problem and get the business back on the right track. Here, 19 Forbes Business Council members share some key signs of unsustainable growth and provide actionable strategies to address these challenges head-on.
1. An Overall Decline
An unsustainable growth rate for a business is evidenced by declining service quality or customer satisfaction due to rapid expansion without adequate resources. Leaders must assess the situation, identify areas of weakness and develop a plan to slow growth, hire staff or shift priorities to maintain quality. – Malcolm Allen, Graduate America
2. Unfulfilled Commitments
One clear sign of unsustainable growth is a business consistently not being able to deliver offered products or solutions to their customers in a timely manner, multiple quarters in a row. This means that demand has far outpaced delivery and resources in the business. – Safir Adeni, Ineda Group
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3. Burnt-Out Employees
Whether a business is growing at a healthy or unsustainable rate can often be reflected in the wellness and engagement of its employees. When a business takes on more than it can successfully execute, employees may be faced with unrealistic expectations and experience burnout. Listen to your people—your talent is your greatest asset for long-term growth. – Jennifer Twiner McCarron, Thunderbird Entertainment Group
4. Poor Financial History
The first and foremost sign of unsustainable business and unpredictable problems lies in the financials. Look at your profit and net profit range over the last few years. If it feels like the business is blowing a bubble and attracting more and more cash to burn, just stop and find a better thing to do. – Egor Kirin, Agro.Club Inc.
5. Inadequate Resources To Sustain The Business
One clear sign of unsustainable business growth is a lack of resources, such as staffing or cash flow, to sustain the pace. Leaders should prioritize strategic planning, scaling resources and seeking expert advice to maintain stability and profitability. Adjusting the business model or pivoting to other strategies can also ensure long-term success. – Justen Arnold, Flexx Mobility & Performance LLC
6. A Struggle To Fulfill The Increased Demand
When a business struggles to fulfill increased demands that can lead to decreased quality, customer dissatisfaction and overworked employees. Leaders should pause, reassess their strategies and focus on building a scalable infrastructure by investing in technology, optimizing processes, hiring and training employees and prioritizing customer satisfaction. – Vladislav Kraynov, MSOFT
7. Diminished Quality Standards
A sign of unsustainable business growth is struggling to maintain operations and quality standards. To correct this, leaders should identify and optimize inefficiencies in processes and adopt sustainable growth strategies such as outsourcing or collaborating with partners. This ensures long-term success. – Nona Djavid, eLIVate Retreats
8. Emphasis On Quantity Over Quality
The clearest sign is when the business begins to sacrifice quality for quantity. This can manifest in a number of ways, such as increased client complaints and longer turnaround times. To correct this, leaders must take a step back and address the root cause. They may need to automate processes or invest in additional resources. By taking a measured approach, businesses can sustainably thrive. – Danielle Cuomo, Virtual Assist USA
9. Strained Operations
A sign of unsustainable growth is when rapid expansion strains operations, causing bottlenecks, quality decline and low employee morale. To address this, leaders should reassess strategy, streamline processes, track key metrics, foster open communication, invest in employee development and pace growth to ensure resource adequacy. – Andrei Neacsu, HyperSense Software SRL
10. High Churn Rate
If your business is expanding quickly but has a high churn rate, that’s a sign that it is growing at an unsustainable rate. Leaders should dig deep into the problem to evaluate what the possible root causes are for the high churn and make the proper investments to curate the problem. Potential solutions may include hiring highly qualified personnel or implementing new systems, processes and procedures. – Raquel Gomes, Stafi
11. Overlooking Maintenance
One sign of unsustainable growth is when the maintenance things you were going to do—the strategic investments—don’t get done. For example, you may need to do system upgrades, increase warehouse or acquire office space. When you’ve overwhelmed your capacity, and that’s consuming your company, the maintenance things don’t get done because everyone is tied up in the growth. That’s unsustainable. The casualty is your people and current customers. – Rocky Romanella, 3SIXTY Management Services, LLC
12. Incurring Too Much Debt
A clear sign that a business is growing unsustainably is when it’s taking on too much debt. Leaders should reevaluate their growth strategy, focus on profitability and consider reducing expenses or raising capital. It’s important to ensure that growth is matched with adequate resources and a solid financial foundation to sustain long-term success. – Chris Kille, Payment Pilot
13. An Increase In Complaints
You will understand this when you receive too many complaints from customers, partners, employees and especially your operations team. You will be surrounded by problems and complaints. To correct this, business leaders should work on their overall approach and start by taking a critical assessment of everything from the business model to every small aspect of the business. – Raj Maddula, Global Squirrels
14. No Profit Growth
One clear sign that a company is growing at an unsustainable rate is when leaders are trying to grow but there is no significant increase in profit. To address this, your company should focus on finding ways to increase your revenue while also streamlining operations and cutting costs. – Pavel Stepanov, Virtudesk
15. A Breakdown In Current Systems
Unsustainable growth can be identified by various signs, such as struggling to maintain operations and quality standards, cash flow problems, declining customer satisfaction or quality, taking on too much debt and experiencing burnout among workers. Leaders should reassess their business strategy, implement efficient systems, maintain company culture and invest in employee development. – Yasmin Walter, KMD Books
16. Cash Flow Challenges
One clear sign that a business is growing at an unsustainable rate is when it starts to experience cash flow problems. Leaders should reassess their business plan, streamline operations and consider raising capital or reducing expenses to improve cash flow and ensure sustainable growth. – Daniel Danino, Volta Metals
17. Turning Down New Opportunities
One clear sign is when the team is always at, or over, capacity, and turns down new project opportunities. Here at the Bid Lab, we experienced intense growth over a short period of time. This meant the existing team, which was the cause of this explosive growth due to going above and beyond in the first place, literally could not possibly take on even more. When go-getters start saying no, you are growing too fast! – Maurice Harary, The Bid Lab
18. Too Low Prices Points
Price points that are too low is a sure sign of hyper-growth. Rather than aiming for hyper-growth, which only leads to unwanted volatility, leaders instead have the opportunity to immediately raise prices to levels that will sustain steady growth. – ‘Smitty’ Robert J. Smith, Robert J. Smith Productions
19. Overloaded Employees
Unsustainable growth creates overload for existing workers and results in burnout. This is bad for workers because they’ll experience stress reactions, leading to decreased performance and quitting. That, in turn, makes growth even more unsustainable. Leaders need to watch and listen to workers to see how they’re adapting to growth initiatives and what they need to make sustainable growth successful for everyone. – Jerry Cahn, Age Brilliantly
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