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As executives look to focus on growth over cost-cutting in 2004, two consultants from global management consulting firm AT Kearney have written a book that shows business leaders how their companies can achieve sustained growth in any economic environment.
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| Consulting-Times E-zine
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In STRETCH! How Great Companies Grow in Good Times and Bad, A.T. Kearney vice presidents Graeme K. Deans and Fritz Kroeger combine financial performance data mined from 29,000 global companies with in-depth analysis of more than 80 companies to create a practical plan for achieving positive organic growth.
Stretch! offers a four-stage framework for growth and then outlines the precise steps for implementing each stage. The authors' research shows that growth has little or nothing to do with industry maturity, geography or business cycle. Rather, successful growth is possible in any industry, in any region at any time. Growth isn't dependent on outside factors but on the internal actions a company takes.
The authors use numerous case studies to illustrate those actions in each of the four stages of growth:
— Operations: Dramatically improve internal processes such as product development, sourcing, quality, delivery, customer service, sales and pricing.
— Organization: Find the optimal organizational structure that best suits the company, determine opportunities to reconfigure the company's value chain and evaluate and adjust compensation, reward, and incentive programs.
— Strategy: Build off the strategy that made the company successful in the first place. Take a fresh, holistic look at the strategy, and focus on specific growth within it.
— Stretch: Expand the business frontier strategically and geographically, breaking down old barriers to create new products for new markets, new customer bases, and new geographies.
Deans leads A.T. Kearney's strategy practice in North America and specializes in business and marketing strategy, organizational design and effectiveness, and corporate restructuring. Kroeger is the co-author of nine books on restructuring, growth strategy and merger integration. They argue that too many CEOs take a simplistic approach to growth, searching for a silver bullet or short cut. Yet organic, sustainable growth comes only through carefully laid strategies and obsessive attention to execution, not to mention long-term investment and patience, say the authors.
Deans and Kroeger also show companies how they can leverage a 'Value- Building Growth Matrix' to create greater shareholder value. This matrix identifies four distinct categories of companies:
— Value growers: Outperform their peers in revenue and value growth to achieve dominance.
— Profit seekers: Have above-average value growth but are lagging in revenue growth.
— Simple growers: Place strong emphasis on revenue but don't deliver on the value axis.
— Underperformers: These “dogs” under-perform in revenue and value growth.
Using this matrix, Deans and Kroeger reveal how any company can select the right leadership for growth, establish a growth culture, as well as organize for globalization and geographic expansion. The authors of Winning the Merger Endgame (published in 2003), Deans and Kroeger observe that the most successful companies generally have a great deal of expertise integrating acquisitions.
Deans and Kroeger believe a strategic renaissance is possible. Boards of directors, they observe, should actively pursue growth strategies and once again devote time and attention to core business fundamentals. CEOs are realizing that growth has little to do with magic formulas, brazen moves, and gut intuition and everything to do with strong operations, consistent strategies and flawless execution. A new era of strategic growth management is dawning for a legion of stalled business leaders, according to Deans and Kroeger, and companies that fail to plan for real growth will be left behind.
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