Growing organically rather than just through mergers and acquisitions is the key to long-term success, but many companies still fall well short when it comes to meeting their growth objectives, a U.S study has concluded.
The survey of chief executives and finance officers in 174 top U.S firms by consultancy Mercer Delta Consulting looked at the 10 practices that statistically differentiated "growth champions" from all other companies.
It found growth champions were very clear about their markets or businesses and where growth will come from.
They are articulated clear profit models that were well understood by managers and focused the whole business on a few initiatives.
They engaged in the disciplined execution of growth initiatives at all levels of the organisation and translated customer insights into new offerings and/or business improvements.
Growth champions also maintained strong metrics/feedback to identify what was or wasn't working.
They made effective trade-off decisions about which opportunities to invest in, ensured there was sustained alignment of their leaders and actions to support growth strategies and, finally, built on their leaders' capabilities to grow the company from within.
"Growth is always a priority on the minds of CEOs: organic growth specifically is a central issue and our CEO clients increasingly seek ways to grow organically," said John Parkington, partner at Mercer Delta Consulting.
"But organic growth has historically been difficult to achieve despite being an appealing alternative to the cost and risks associated with growth by M&A.
Successful organic growth was not dependent on size or industry, the research also found.
What set growth champions apart was their ability to implement these business practices in conjunction with one another and to pursue the practices with a greater level of intensity.
"The growth champions implement these key practices in a systematic way, using them Ė oftentimes unknowingly Ė as mutually reinforcing actions for maximum impact," said Parkington.