Strategies for Growth

The Boston Consulting Group recently studied the performance of 1,600 global companies with revenues over $1 billion. These were mature businesses that found ways to grow sustainably. They discovered only 310 companies, 1 in 5, broke away from stagnant growth & grew at twice the rate of their peers, growing sustainably for at least 5 years.

Let’s look at the lessons learned from these companies:

THEY EARNED THE RIGHT TO GROW

They looked at the basics – operational soundness, reinforcing their core business and avoiding expensive resuscitation of areas that weren’t sound. They kept or increased their margins & concentrated on areas of advantage with returns.

THEY KNEW THEIR ADVANTAGE

The companies that did best, defined exactly what they did well & used that knowledge to clean out the rest. Wolverine for example, had advantage in making sanded pigskin leather. This allowed the company to make shoes with real market appeal. Understanding this, Wolverine chose to focus & aggressively expand their casual & work shoe range & lose their poorly performing athletic shoe area.

THEY EXPANDED THEIR FIELD OF VISION

By looking carefully before expanding, many companies found signals in their core area they could expand on, unusually profitable customer bases or rapidly growing subcategories. There were often areas delivering standalone growth that benefited the core business which could be exploited. Finally, some found old advantages that could be used in radically new ways. Gerber, for example, expanded from baby food to the toddler segment & also exploited its trusted brand name by moving into juvenile life insurance.

THEY INTEGRATED VISION, CHOICES & ACTION

Having envisioned the phonograph, Thomas Edison drew a quick sketch marked with the words “Make this” & handed it to his machinist, John Kruesi who turned vision into action. In large businesses this ability to turn vision into action can be lost. One company is deliberately creating a culture of growth execution - they define new & needed actions then schedule what needs to be done, how & by whom with targets. The ability to align vision, choices, initiatives and actions successfully was a hallmark of all the successful companies.

(Adopted from an article by Jeffrey Tobias, Elements of Growth: Four strategies you should adopt – or stagnate!  thestrategygroup.com.au)


Peter Irvine
www.peterirvine.com
Peter is Co-Founder of Gloria Jean’s Coffees, author of ‘Win In Business’ and ‘Building your Business, your People, your Life’ and keynote speaker.

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