Grow for Broke
www.hbr.org
H B R CAS E ST U D Y
Should Paragon Tool further its growth ambitions by trying to acquire
MonitoRobotics?
AND
COMMENTARY
Growing for Broke by Paul Hemp
•
Four commentators offer expert advice.
Reprint R0209A
Paragon Tool is pouring money into growth initiatives. How long can it afford to wait for profits to bounce back?
H B R CAS E ST U D Y
Growing for Broke
COPYRIGHT © 2002 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
by Paul Hemp
Look, you’ve got to grow. It’s what our economy is all about. Hey, it’s what our country is all about! Certainly, it’s what drives me. My father, Constantine Anaptyxi, came to America from Greece because he saw big opportunities here. He worked hard, took a few risks, and realized his dreams. I came to this company as
CEO five years ago—giving up a senior VP position at a Fortune 500 manufacturer—because
I saw big potential for Paragon Tool, then a small maker of machine tools. I didn’t make the move so that I could oversee the company’s downsizing! I didn’t intend to create value—for our customers, for our employees, for our shareholders—by thinking small!! I didn’t intend to shrink to greatness, for God’s sake!!!
Okay, so I’m getting a little worked up over this. Maybe I’m just trying to overcome my own second thoughts about our company’s growth plans. I know it isn’t just about growth; it’s about profitable growth, as my CFO, Will-
iam Littlefield, is always happy to remind me.
“Nicky,” he’ll say, “people always talk about getting to the top when they should be focusing on the bottom...line, that is.” Quite a comedian, that Littlefield. But lame as the quip is, it tells you a lot about Littlefield and what, in my opinion, is his limited view of business. Sometimes you’ve got to sacrifice profits up front to make real profits down the line.
To me, acquiring MonitoRobotics holds just that kind of promise. The company uses
H B R CAS E ST U D Y
Should Paragon Tool further its growth ambitions by trying to acquire
MonitoRobotics?
AND
COMMENTARY
Growing for Broke by Paul Hemp
•
Four commentators offer expert advice.
Reprint R0209A
Paragon Tool is pouring money into growth initiatives. How long can it afford to wait for profits to bounce back?
H B R CAS E ST U D Y
Growing for Broke
COPYRIGHT © 2002 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
by Paul Hemp
Look, you’ve got to grow. It’s what our economy is all about. Hey, it’s what our country is all about! Certainly, it’s what drives me. My father, Constantine Anaptyxi, came to America from Greece because he saw big opportunities here. He worked hard, took a few risks, and realized his dreams. I came to this company as
CEO five years ago—giving up a senior VP position at a Fortune 500 manufacturer—because
I saw big potential for Paragon Tool, then a small maker of machine tools. I didn’t make the move so that I could oversee the company’s downsizing! I didn’t intend to create value—for our customers, for our employees, for our shareholders—by thinking small!! I didn’t intend to shrink to greatness, for God’s sake!!!
Okay, so I’m getting a little worked up over this. Maybe I’m just trying to overcome my own second thoughts about our company’s growth plans. I know it isn’t just about growth; it’s about profitable growth, as my CFO, Will-
iam Littlefield, is always happy to remind me.
“Nicky,” he’ll say, “people always talk about getting to the top when they should be focusing on the bottom...line, that is.” Quite a comedian, that Littlefield. But lame as the quip is, it tells you a lot about Littlefield and what, in my opinion, is his limited view of business. Sometimes you’ve got to sacrifice profits up front to make real profits down the line.
To me, acquiring MonitoRobotics holds just that kind of promise. The company uses