Stanford Graduate School of Business professors Antonio Davila and George Foster say that startup firms that act quickly to put in place operation budgets, cash budgets, and financial monitoring systems to measure profitability, customer acquisition costs, etc. have higher growth rates in terms of revenues and head count. These kinds of measurement systems actually seem to fuel growth. Davila says, “Management systems are the foundation for growth. As an executive in one of the companies we worked with described it, ‘management by personality’ only works up to a certain point. After that, you need to put systems in place.”

Stanford Graduate School of Business Feb 2005