Growth isn’t just about building value; it’s fundamental to long-term business survival. Consider this: almost half of the 100 largest companies on the New York Stock Exchange 30 years ago that enjoyed strong shareholder returns but did not post top-line growth had been acquired or delisted 20 years later.
Despite such compelling statistics, we find that many companies continue to focus on controlling costs as a way to drive earnings. When controlling costs dominates the corporate agenda, it sucks the oxygen out of any growth plan. Conversely, we’ve found that companies that have a clear agenda for organic growth and pursue it systematically outperform the competition….
….How companies actually capture that growth, however, has changed drastically with the rise of technology and advanced analytics. Digital has changed the nature of growth by rapidly accelerating the pace of business, expanding the scope of competition, and often introducing new business models seemingly overnight. Companies that are most successful at driving growth are those that can execute across multiple dimensions and inject speed, agility, and analytics into their corporate DNA…
….Given this new dynamic, we wanted to understand better how businesses think about driving organic growth and what the top growers actually do to achieve it. To that end, we surveyed almost 600 executives at leading companies around the world. We found that companies are active across three broad growth dimensions:
- Investing. These companies squeeze funds out of various sources (e.g., admin) to double down on existing high-growth activities. An example of this approach is Zara, which found a winning model in its rapid-fashion program and grew by relentlessly investing in it.
- Creating. Winning companies build value by designing and deploying new products, services, or business models. Adobe, for example, has grown rapidly by developing its Creative Cloud services and establishing an innovative new model in which customers get access to all Adobe products for an ongoing fee.
- Performing. These businesses continuously optimize core commercial capabilities in sales, marketing, pricing, and customer experience. Capital One epitomizes this approach by using advanced customer data to identify microsegments of customers, tailor products to them, track trends, and test products.