At the end of the day, growth is every company’s most important objective and most important challenge. According to our recent research, 90% of surveyed executives (senior executives in strategy, product, innovation, marketing and related fields) indicate that growth and innovation will become even more of a challenge amidst macroeconomic uncertainty, structural change and competitive complexity. A recent MIT Sloan article stated “CEOs are faced with the dual challenge of protecting their backyards from upstarts and incumbents while simultaneously devising strategies that will guide their growth for the next five years.” Solving this growth challenge is the key value creation opportunity for companies, as capital markets consistently reward the companies that can confidently articulate strong future growth stories. Specifically, as much as 70% of the enterprise value of a company is based on market expectations of its future growth prospects over the medium to long-term time horizons. So, where will future growth come from? How will it be sustained? Should business growth be left to chance and the mercy of volatile markets and changing customer behavior? These are the questions that modern growth champions grapple with everyday.
While the idea of enterprise value can seem a bit abstract, there are other implications that are more “down to earth”. Specifically, sustainable growth over the medium term signals a company’s relevance to customers and markets. Longer term, growth has direct implications to its viability, and in some cases its very survival. In practice, companies create value by taking action today to generate future growth and cash flows at rates of return that exceed their cost of capital. With such a significant portion of current market capitalization (i.e. stock prices) being dependent on anticipated strategic growth, rather than current operating performance, senior business leaders and Modern Growth Champions must make their medium to long-term future growth prospects an urgent priority.
Introducing the modern discipline of Growth Strategy
Business growth can often be over-simplified into familiar strategies such as organic growth, inorganic growth, growth from adjacencies, or “white space” growth. Further, many companies simply don’t view “business growth” as a business process. As a result, the processes associated with achieving business growth and improving future revenue and growth prospects are generally inconsistent, unsynchronized or, in many cases, completely absent. As companies realize that their traditional playbooks may no longer be enough to actually achieve these outcomes, the central question becomes: What’s the alternative?
Growth Strategy is an integrated, dedicated and distinct business discipline that is purpose-built to make revenue and growth more accessible, achievable and repeatable. Growth Strategy accomplishes this by bridging the gap between strategic planning and innovation disciplines and the revenue generating processes of marketing and sales to help companies mobilize around unmet customer needs to achieve three crucial goals that we call The Growth Imperative:
Growth strategy offers a unified business process that is purpose-built for growth and innovation. Like any modern business discipline, growth strategy is designed to structurally enable individuals and entire organizations through a consistent management framework, defined workflows and information empowerment. Collectively, the elements of growth strategy provide the consistency, structure and strategic clarity needed to help companies evolve from tactical, short-term and incremental growth to strategic, long-term and transformational growth – the key ingredients for enterprise value creation.
Author: Wayne Simmons
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