Real growth in the new economy
Frank van den Driest
Institute for Real Growth
During the postwar economic boom of the last six decades, many businesses relied on scale and efficiency tactics to sustain their growth. Today, however, these patented processes are starting to fail as companies hit the limits of how many markets they can enter and how many expenditures they can cut. Moreover, an increasingly knowledgeable and conscientious customer base is challenging brands’ licenses to operate, while disruptors are tearing down barriers to entry and bypassing well-established niches and intermediaries. These days, no source of growth is guaranteed.
However, growth still exists – albeit in uncomfortable places. By exploring unexpected partnerships, embracing specialty brands, and implementing new business models, forward-thinking marketers have already sketched out a new growth architecture. But this is only the beginning. To continue delivering sustained top-line growth, companies must truly reject the tired formulas of the past and develop an architecture for “real growth.” Accordingly, our recent study of vision interviews with over 500 business leaders, combined with a survey of 1,500 respondents, revealed that companies already delivering “real growth” act very differently than underperformers.
First, growth leaders reimagine what they offer and what markets they sit in. They assess market developments with a wide-angle lens that leaves no growth source unexplored. Rather than see a 30% category share in as a laurel to rest on, growth leaders redefine their markets until they are 3% players in more broadly defined market spaces, with visionary plans to eventually capture even larger slices of much larger pies. From there, they play checkers and chess simultaneously, optimizing what works while identifying and embracing new business models. They build in-house innovation labs and explore unexpected acquisition possibilities. They then use these perspectives and capabilities to deliver unique, ever-evolving experiences. Rather than chasing ephemeral customer satisfaction, they embrace the fact that customers are, in the words of Jeff Bezos, “always beautifully, wonderfully dissatisfied.”
Second, overperformers rethink how they organize themselves. They rewrite cultural scripts, loosening the bonds of procedure and structure in favor of innovation, entrepreneurship, connectivity, and diversity among decision makers. They then carry this cultural openness into their organizational structure: rather than acting like large, hard-to-steer oil tankers, they act like flocks of birds, moving as seamless formations towards a common goal while anticipating opportunities and threats. Growth leaders foster whole-brain teams to produce whole-brain insights, combining creativity, data, and technology to innovate where others are complacent.
Finally, growth leaders challenge assumptions about why they do what they do. Rather than prioritizing profit, they accept that real growth stems from a human-centric approach. They focus on tangibly benefitting their customers, their colleagues, and their communities. They recognize that innovative market definitions, consumer experiences, or organizational cultures can and will be adopted by competitors. To continue to stand out in authentic and inspiring ways, growth leaders go a step beyond and tie their ambitions to something truly meaningful.
While these principles form a strong base for future growth, they are not enough on their own. Our study has shown that real change will not happen in an organization that only sees these principles as feel-good slogans or temporary solutions. To make sure they become more than that, leaders across functions must take a stand, demonstrating humility, passion, courage, and a willingness to empower their teams. Only then can they drive “real growth” across the business.
The Institute for Real Growth is not-for-profit and independent. Its co-founders are WPP, Kantar, Google, Facebook, Spencer Stuart, LinkedIn, Saïd Business School at the University of Oxford, and the New York University School of Professional Studies.
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