What if not growing were the best strategy for a company? A Case for “No-Growth”
The frantic pursuit of growth doesn't convince all entrepreneurs. The skeptics? Micro-businesses, the backbone of the French economy. A study sheds light on the reasons why some companies choose not to grow.
Marion Polge, University of Montpellier; Colette Fourcade, University of Montpellier and Martine Spence, University of Ottawa
In economic thinking, a company that isn’t growing is a company that is failing. Both public policy and expert commentary present growth as an imperative.
In a study of 13 micro-enterprises from various sectors—
, crafts, manufacturing, services, and digital—that were monitored over a 12-year period, we explore a counterintuitive reality: not growing can become a fully embraced strategy.
In a country like France, where 96% of the business sector consists of micro-enterprises and 99.9% consists of very small, small, and medium-sized enterprises (VSEs and SMEs), this conclusion calls for a genuine shift in perspective.
Chosen Non-Growth
The companies studied share a common trait: after expanding their workforces, they deliberately chose to return to a size close to their initial state. Not out of necessity, nor as a result of a setback, but through strategic determination. The most surprising part? This decision was accompanied by an improvement in their margins, their efficiency, and, above all, their workplace well-being.https://datawrapper.dwcdn.net/NtT1o/1/
Contrary to the usual scenarios, these entrepreneurs are not seeking to gain market share or hire more and more people. They are looking for something else: mastery of their core business, quality relationships with their customers, and the opportunity to continue doing work that is meaningful.
For example, one woodworking shop manager we interviewed expanded his business before deciding to scale back. In his search for new customers, he lost sight of the purpose of his venture. He then chose to return to a more manageable size:
“When I left the studio to expand our client base, I lost my way. The company was no longer what I wanted it to be. Now, we turn down projects that don’t align with our philosophy.”
To them, growth seems less like a desirable goal than a threat—the threat of diluting their expertise and becoming bogged down in managerial responsibilities that have become overwhelming. Staying small has come to mean remaining true to their entrepreneurial vision.
The Spiral of Quiet Innovation
Contrary to the common misconception that only growing companies innovate, the micro-enterprises studied do innovate… by refocusing on their core business to better realize its potential. This subtle innovation operates in a spiral pattern.
For example, a metalworker interviewed in this piece is modernizing his workshop with state-of-the-art tools. Far from standardizing his operations, these investments allow him to revisit traditional techniques without having to increase his workforce:
"I refine traditional techniques by combining them with new technologies. Thanks to these tools, we have reimagined our old techniques and made further progress."
Their development does not occur through sudden breakthroughs, but rather through an iterative process that leads them to explore their areas of expertise. A metalworker reimagines traditional techniques using digital tools; a carpenter redefines his craft by combining traditional materials with contemporary methods; and a maker of organic cosmetics develops innovative formulas through local collaborations.
This in-depth work provides these companies with an unexpected benefit: the more they refocus on a narrow core of excellence, the more inimitable—and therefore indispensable—they become.
Living the "Entrepreneurial Spirit"
The other pillar of their strategy is based on relationships. When a project exceeds their scope, they carry it out with local partners rather than hiring new staff. And when an activity strays from their core business, they entrust it to peers.
This network-based approach is not a defensive tactic, but a philosophy of balance. It meets demand without increasing fixed costs, while maintaining quality and absorbing economic uncertainties through integration into an ecosystem of complementary skills. Within this relational landscape, the company remains small, but its territorial—and even strategic—influence expands.
A flooring contractor decides not to do everything himself anymore. When the workload becomes too much or strays from his core business, he entrusts it to trusted colleagues. Collaboration becomes a way to stabilize the business without hiring new employees:
“I don’t want to chase after money anymore… It’s important for coworkers to pass work along to one another. I do what I know how to do, and I share the rest.”
The executives interviewed speak with great candor about the reasons that led them to adopt this approach: not to obsess over securing contracts, but to give themselves the time to work conscientiously and to truly embrace the entrepreneurial spirit.
Core Business as a Strategic Anchor
If these micro-enterprises manage to thrive without expanding, it is because they rely on one key element: their core business, which is not merely a technical category but a space of identity. It is shaped by the leader’s sensibilities, values, encounters, personal history, and, above all, distinctive skills.
Our study reveals that a company’s core business is not fixed. It is built, refined, and strengthened over the years. It acts as a compass that guides innovation decisions, potential collaborations, and deliberate choices to decline certain opportunities. This core business protects the company from the temptation to engage in risky diversification and gives it the depth that compensates for its lack of growth in size.
In reality, growth is shifting from horizontal (broader) to vertical (deeper).
Overcoming the Obsession with Size
The findings of this research raise a profound question: Should we continue to base our economic policy solely on the logic of “always more”? If the majority of small businesses do not wish to grow, what is the point of offering them support that is systematically geared toward expansion, exports, or hiring?
Perhaps it would be better to say:
- to support precision innovation—the kind that strengthens expert know-how;
- to revitalize regional networks that enable small businesses to collaborate rather than expand;
- to support entrepreneurs not by “silo” (digital, quality, exports, etc.), but based on the overall coherence of their trajectory;
- to recognize that performance can be measured in ways other than size.
What if not growing up were a form of progress?
The no-growth strategy has nothing to do with stagnation or resignation. On the contrary, it is a demanding process: refining, choosing, letting go, surrounding oneself with the right people, and innovating without spreading oneself too thin. These companies do not want to grow; they want to do better. They refuse to get bigger just to become stronger.
At a time when the French economy is seeking new drivers of growth, micro-enterprises remind us of a fundamental truth: value is not measured solely by the number of employees, but also by excellence, expertise, and purpose.
What if the future of entrepreneurship lay precisely in this quiet boldness—the boldness to grow in a different way?
Marion Polge, Associate Professor (HDR) in Management Sciences, University of Montpellier; Colette Fourcade, Honorary Associate Professor, University of Montpellier and Martine Spence, Full Professor, Telfer School of Management, University of Ottawa
This article is republished from The Conversation under a Creative Commons license. Readthe original article.