Have you ever wondered how companies become “too big to fail”? For the past year, we’ve been told that certain firms are so globally interconnected that their closure would send devastating shock waves throughout the worldwide economic system. To prevent this seismic effect, we’ve accepted the fact that governments need to rescue these companies either through bailouts or forced mergers.

But the odd thing about this premise is that our entire economic system is based on getting big. Investors expect the managers of their companies to pursue growth strategies—to drive revenues and profits continually larger and larger. Bonuses, stock prices and analyst ratings are all based on growth. So we encourage—even insist—that companies keep growing, and then we get angry at managers when they create companies deemed “too big to fail.”

To resolve this contradiction, we need to focus not on growth per se, but on the effective control of growth. The managers of Citibank, AIG and General Motors did a great job of growing—of buying companies, introducing new brands and winning new customers. But as these companies became larger and more complex the executives of these mega-firms encouraged further complexity by allowing managers in far-flung places to operate independently. As a result, senior managers lost track of what was being done, along with the associated risks.

Effective executives understand that growth is not a one-way street. While adding new products and services, these managers are also pruning old products, streamlining processes and looking for opportunities to make things simpler for their managers, employees and customers. Without the hard work involved in pruning the firm, unbridled growth can get out of control.

Schneider Electric, a Paris-based firm with over 100,000 employees, is a good example of what it takes to responsibly manage growth. Over the past five years the firm has made over 80 acquisitions around the world, while also introducing new products and services. To control this growth, senior management has made it a strategic imperative to consolidate country and regional operations, standardize processes and reduce SKUs (stock keeping units). These efforts have had a major bottom-line impact: At midyear, Schneider Electric reported over $450 million in savings.

We all agree that growth is an imperative. But uncontrolled growth without continual pruning and streamlining is a potential recipe for disaster. So take a look at your own company. Are you in danger of getting “too big to fail”—or at least too big to succeed?

Ron Ashkenas is a managing partner of Robert H. Schaffer & Associates, a Stamford, Connecticut, consulting firm, and the author of the forthcoming book, Simply Effective: How to Cut Through Complexity in Your Organization and Get Things Done.