Our perspective on growth
Growth is at the top of most companies’ agenda, but few companies, according to our research, have a clear view of how they are going to grow, and most executives doubt they will deliver against their companies’ growth aspirations.
Don’t chase growth – focus on building your company’s growth engine, and growth will result.
The problem is that too many companies are chasing growth wherever it presents itself, rather than focusing on building an engine for growth, one that is designed around what they do best.
By chasing growth and pursuing many growth opportunities in parallel, companies spread their resources too thin and leave potentially viable growth paths under-resourced. They may experience a temporary revenue boost, but the gains are almost never sustainable.
Even worse, this lack of focus prevents the company from building the type of advantage that leads to long-term growth. Consistent growth, in our view, is the result of building a growth engine – a system of a handful of capabilities that provides real differentiation in the market. From there, growth becomes the result of leveraging that advantage again and again, by pursuing growth paths that are in line with what the company does – or could do – uniquely well.
The most powerful growth engines are made up of a handful of capabilities providing real differentiation in the market.
With such a powerful growth engine in place, companies can take a fresh look at the growth opportunities that present themselves. They can use a capabilities lens to assess and prioritize initiatives to grow in the core, through expansion, or by disruption.
Scroll over the three growth paths below to learn how a capabilities lens can guide your growth choices in each situation.
1. Capture overlooked “headroom” for growth in your current business.
- Look for powerful ways to deploy and enhance your capabilities system in order to unlock growth from the core business. Don’t conclude too soon that you have exhausted growth from the core.
- Look to mergers, acquisitions, and alliances to increase the impact from your existing capabilities system and to strengthen the capabilities that benefit your core business.
2. Expand the boundaries of your business.
- Be clear about the capabilities that make your company unique and successful.
- Expand into adjacencies where you can successfully deploy and scale your differentiating capabilities. Don’t fall into the adjacency trap by expanding into businesses that may look related but require different capabilities to succeed.
3. Disrupt and respond to change with new business models.
- Don’t consider change to be a threat to your existing business; instead, drive change to create opportunities for the busin.
- Look for ways to disrupt markets that leverage some of your existing differentiating capabilities.
- Be clear about the additional capabilities you’ll need, and develop or acquire those.