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Growth and Underinvestment


Invest in a firm's resources and capabilities to grow. When growing action is there, it increases the demand, but the firm's performance level acts as a limit to that growth.

Description of Behavioural Traits


In a "Growth and Underinvestment" situation, growth approaches a limit that could be eliminated or postponed if capacity investments were made. Instead, as a result  of policies or delays in the system, demand (or performance)  degenerates, limiting further growth. This leads to further withholding of investment or even reductions in capacity, causing even worse performance


Dig into the assumptions that drive capacity investment decisions. If past performance dominates as a consideration, try to balance that perspective with a fresh look at demand and the factors that drive growth

If there is a potential for growth, build capacity in anticipation of future demand

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