Harvard Business School professor Gary Pisano’s research suggests that growing too fast without the right infrastructure can do more harm than good.
His study of nearly 11,000 public companies found that while growth is a natural business goal, most firms fail to sustain high rates of expansion. Instead, he advocates for a strategic approach to growth; one that balances ambition with resources, capacity, and long-term profitability.
Gary explains that companies often fall into the trap of chasing aggressive expansion targets without considering their ability to meet them.
“Growth is a strategic goal,” he says. “You have to think about how fast to grow, how fast you can grow, and you want to maximise what you can do within the constraints.”
In real estate, this means agents and agencies must align their growth strategies with market conditions, team capabilities, and operational efficiency, rather than simply trying to outpace the competition.
When growth outpaces capacity
One of the biggest challenges in real estate is maintaining service quality while scaling up. A growing agency might take on more listings, expand into new territories, or hire more agents, but without the right support systems in place, this can backfire.
In his HBR podcast, Gary warns that companies that grow too fast often “damage the very things that made them special” in the first place.
In real estate, this could mean a firm struggling to maintain its customer service standards due to high transaction volumes or an agent overwhelmed by too many clients, leading to missed opportunities and poor client experiences.
A prime example is agencies that aggressively recruit agents without a solid training or mentoring structure in place. While hiring more agents might increase short-term sales, it can also dilute company culture, create inconsistencies in service quality, and ultimately weaken the brand.
The right way to scale in real estate
Successful real estate growth requires a balance between opportunity and infrastructure. Gary suggests a three-part framework: rate of growth, direction of growth, and method of growth.
Applying this to real estate, an agency must determine:
- Rate: How fast can the business grow while maintaining quality?
- Direction: Should the focus be on high-end properties, first-home buyers, or commercial real estate?
- Method: Will growth come from hiring more agents, investing in technology, or expanding into new locations?
He points to the example of US fast-food chain Pal’s, which only opens new locations when they have trained and ready store managers.
A similar approach in real estate could mean only expanding when experienced agents or managers are available to uphold service standards.
Sustainable growth over market hype
The real estate market is cyclical, and agents who overcommit to expansion during boom times may find themselves struggling when market conditions shift. He explains the importance of anticipating bottlenecks, whether in staffing, market demand, or operational processes, before committing to rapid expansion.
He also cautions against assuming that demand will always remain high, referencing the example of Peloton, which over-invested in production during the pandemic housing boom, only to face a slowdown once demand stabilised.
In real estate, similar missteps could occur when agencies scale up aggressively during a seller’s market but are left overextended when conditions shift in favour of buyers.
Ultimately, for real estate agents and business owners, the key to long-term success isn’t just selling more properties faster – it’s building a business that can sustain growth, provide consistent service, and adapt to changing market conditions.
As Gary puts it: “You don’t want growth to kill the company.”
The same logic applies in real estate; growing strategically, rather than reactively, is what ensures lasting success.
