What do we mean by ‘sustainable’ and ‘profitable’ growth? Let's first distinguish between the two terms: “sustainability” refers to an organisation's ability to guide and control growth. In my experience, I have often seen organisations grow in an ‘uncontrolled’ manner, thereby creating the conditions for a crisis (insufficient capital, cash or other resources). The term “profitable”, on the other hand, refers to the ability to maintain a level of profit equal to or higher than the starting level: a company might consider significantly increasing its turnover by reducing the price of its products/services, but in this case, the level of profit would be affected, potentially leading to a business crisis.
Putting the two concepts together, growth is sustainable and profitable when the organisation is able to drive the level of growth while maintaining control over its ability to generate profit.
An organisation that wants to grow continuously over time (the red curve in the image below) in a sustainable and profitable manner will have to do so by carefully monitoring its “stability” (the green curve), i.e. maintaining control over resources and the ability to keep satisfying customers in terms of relationships, production and delivery.
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