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The challenge of delivering sustained top-level growth

Bart Michels
UK Country Manager

Keeping it real

The challenge of delivering sustained top-level growth

Achieving growth today is challenging. It’s fair to say that many of us have relied on the same tried-and tested growth models for decades. When we did something well in one place, we’d roll it out to other places. When we figured something out, we’d cut costs and do it more efficiently, add features to it, and we’d apply it to the category right next door. We had formulas for how we would grow. But those formulas are badly failing us today.

It’s not as simple as brands just trying out a new tactic here and there. We need to develop an entirely new growth architecture. But to start, we need to understand what exactly is meant by “real growth”.

We’ve all seen growth achieved by cutting costs and immediately driving the bottom line – but that’s not what we mean. What we’re looking for is learnings from organisations that are able to fuel, and drive sustained, top-level business growth.

A three-year analysis of almost 3,000 brands in Kantar’s BrandZ database shows that only 6 percent of brands manage to grow significantly in the course of a year. Sadly, even among this small group of brands, very few – less than one in 10 – manage to keep on growing to the end of the three-year period. And while the majority do manage to hold the ground gained for the remainder of the three years, one in three does not. Short-term growth is no guarantee of longer-term success.

So, what’s holding back growth?

Firstly, we’re rapidly growing past the idea of barriers to entry. The old rule was that you make big investments and you keep everybody out, but those barriers are falling apart. Brands like Airbnb have taken traditional competitors by surprise and knocked them for six.

And new players are breaking the rules. How they brand themselves, how they communicate, their business models. Brands like Capsule, the pharmacy that comes to you, are thriving by showing just how many rules they break.

Finally, disruptors are being disrupted themselves. Whether it’s Google with Waze or Facebook with Instagram, companies can’t coast on their reputation as disruptive and expect growth to follow.

But none of this means that growth has become impossible. It’s just evolved, in ways that many companies are unable to recognise any more.

What does that growth look like?

It looks like embracing partnerships that you may have dismissed a generation ago. It means embracing niche brands, catering to market segments that were once ruled as too small and unimportant to target. And it looks like, in many cases, going direct to consumer.

In response to these shifting sands, we created the Institute for Real Growth - a unique study exploring contrasting business cultures to understand the difference between high and low-performing organisations.

The study was vast in scale: we interviewed 500+ business leaders in 15 markets. Those interviews spanned markets with different business cultures (like China versus the US), across developed and developing markets, unicorns and highly established businesses, across disciplines, and even levels of experience and seniority.

We then added quantitative research with over 1,500 respondents, across 73 markets. After that came AI analysis. Our inputs were everything published about growth over the last six years by anybody in the know, to look for patterns. And we partnered with LinkedIn, to analyse data from over 3 million employees at overperforming and underperforming companies. This totals up to over 800 million connections and provides a high level of quantitative rigour.

And out of that process came the following seven building blocks that companies must embrace to achieve growth.

This goes far beyond a list of tactics that can give you an incremental advantage here and there. The Architecture for Real Growth:

•        Is human-centric

•        Recognises and addresses all stakeholders’ needs

•        Future-proofs organisations by uniting creativity, technology and data

•        Delivers ever-evolving experiences

To deliver top-line growth, overperformers are rejecting tired formulas of the past and developing a new architecture that delivers sustained growth for all stakeholders.

It’s time to get back to the basics of making better marketing decisions and influencing better business decisions. It means being human-centric with everything we do. It means driving results not for today, not for tomorrow, but for the sustained future. It means listening not only to loud activist investors who want profit now, now, now. Listen as well to the silent majority that wants businesses to drive long-term results and take stands for their communities. It means combining data, creativity and technology. It means future-proofing your organisation, going from an ocean liner to a flock of birds … and beyond.

And the first step to this is identifying your company’s performance across the seven building blocks of real growth. Be brutal and honest. With a real understanding of that, the rest will follow.