Rethinking revenue and growth.
While it is consistently on top of the executive agenda – the proverbial “keep you up at night issue” – achieving sustainable revenue and growth remains a challenge and the #1 priority for surveyed companies. This is particularly true as it relates to strategic growth over medium to long-term time horizons. Solving this challenge is the key value creation opportunity for companies as capital markets consistently reward the companies that can confidently articulate strong future growth stories.
With enterprise value as the prize, the case for CEOs, CFOs, Boards, senior business leaders and practitioners to place more emphasis on medium to long-term, horizon 2-3 revenue and growth becomes clear and urgent.
Why is this all so important? Revenue Blindness makes companies vulnerable to the external structural changes, market complexity and hyper competition that define the new business environment. In the worst case, critical market signals, risks, trends and shifts in customer behavior can be missed, leading to diminished marketplace relevance, decline in growth and an erosion of enterprise value.
2014 Strategic Outlook: Revenue and Growth
In the survey, Chief Executive Officers, Chief Strategy Officers, Chief Innovation Officers, Chief Marketing Officers, and other senior leaders and practitioners were asked a series of questions about their future growth outlook. From the results, three key findings emerged:
1) Revenue and Growth at the Pace of Modern Business.
Most CEOs, CFOs and Boards are intrinsically aware of the essential role that revenue and growth, over the medium to long-term time horizons, play in enterprise value creation. As the survey shows, positioning for long-term growth is the #1 priority, however, as indicated by 23% of respondents, the necessary strategy and actions associated with growth tend to focus on delivering quarterly performance and earnings. This quarterly focus tends to dictate that short-term revenue command the lion’s share of leadership attention and consume the largest portion of corporate resources. Further, 43% of respondents focus on an annual planning cycle that struggles to keep up with the accelerated pace of modern business. To address the urgency of longer term growth, only 22% of respondents adjust strategy in real-time with the real pace of business.
2) Make Someone Accountable for Revenue and Growth.
With the abundance of responsibilities and day-to-day workload that CEOs undertake, it is difficult for them to focus singularly on growth-related matters. Yet, the results show that 53% of surveyed organizations view the accountability for medium to long-term growth falling upon the CEO. While the data is not conclusive, the new business environment warrants the consideration of companies to incorporate growth-focused senior leaders, other than the CEO, and associated practitioners to systematically and continuously focus on medium to long-term growth objectives. Beyond the traditional focus on annual strategic planning, and leading ad hoc transformation and strategic initiatives, adding growth-focused responsibilities equips senior leaders and practitioners to shape how companies achieve the explicit goal of delivering revenue and growth beyond their core businesses; and creates the environmental, structural and cultural conditions where growth can be sustained.
3) Revenue and growth as a dedicated discipline.
The new business environment poses a question as to whether traditional approaches to strategy are enough to solve the medium to long-term revenue and growth challenges. 50% of the surveyed respondents couldn’t identify a growth strategy that was distinct from traditional annual strategic plans or corporate strategies. The survey results indicate an opportunity for an applied growth strategy discipline, dedicated to improving revenue performance, achieving sustainable revenue and growth objectives, and improving future growth prospects.
Conclusion: A New Strategic Logic for a New Time.
Leading senior business leaders are improving revenue performance with a new strategic logic that brings visibility to future revenue and growth as the real engines for value creation. In effect, the most basic function of the C-Suite becomes protecting and creating enterprise value, even in the face of uncertainty, complexity and structural change. Enterprise value, in turn, is heavily dependent on a company’s future revenue and growth prospects. Therefore, establishing a clear view of the future to inform the strategic decision-making, prioritization and capital allocation needed to drive future revenue and growth with confidence becomes an urgent priority for the C-Suite, senior business leaders and practitioners.
 Results are from the 2014 Chief Strategy Oﬃcer Survey conducted by the Innovation Enterprise, an independent B2B multi-channel media brand focused in the information needs of Senior Executives, and Opptiv, the leading provider of enterprise SaaS, research-based insights, and related support services dedicated to helping companies accelerate revenue and sustain growth.
Author: Keary Crawford
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