Delivering value-creating growth demands discipline and, often, a change in mind-set-particularly for companies switching from efficiency footing to a growth one. Many of the habits of strong operators can hold back growth, and it’s critical that the move to a growth mind-set does not abandon a commitment to operational excellence. Growth strategies must include a sharp focus on defining goals, identifying new business opportunities, and managing investments.
To fashion a successful growth strategy, apply these four principles:
1. The nature, number, and risk profile of growth initiatives cannot be set without a clear view of the gap to be closed. The start of any successful growth strategy requires an honest assessment of the growth momentum of the current business and planned initiatives, a clear and shared upside growth objective, and a measurement of the gap between them over the planning horizon. Clarify the growth aspiration and the implied gap.
2. The effort spent looking outward at the marketplace must be matched by the effort spent looking inward at a company’s unique advantages and capabilities. Hidden advantages can be missed. Known advantages may be overstated compared to traditional or maverick competitors. And today’s advantage can be rendered obsolete- or even become a liability- as consumers, customers, and industries change.
3. To best leverage advantages, companies must stretch their thinking. New perspectives can upend longstanding beliefs about “stagnant cores” or “distant adjacencies.” Often, faint signals lost in the noise of today’s core suggest new opportunities; Unattractive adjacencies can become attractive when paired with an acquired capability, or when their collateral value in reinforcing the core is considered.
4. For many companies, finding growth ideas is less difficult than focusing on the ones that matter. The best growth strategies clearly define the size of the prize and have an actionable plan for success that focuses efforts where they will create the most value. Fund the journey properly and instruct management teams to track initiative milestones.