This is the IRG growth study presented to a CFO audience in 2022. It opens on a single question, whether growth is fueled by extracting value or by creating it, and argues that traditional business growth formulas are lacking.
The evidence base is four strands: qualitative interviews with more than 750 CEOs and CMOs, an AI analysis of more than 3,500 growth publications, a quantitative survey of more than 5,000 people across markets and functions, and behavioral analysis of more than three million LinkedIn members. The findings are organized as seven building blocks of growth.
Key findings
- On business models, 71 percent of overperformers show willingness to accept new business models, against 39 percent. The deck describes this as playing chess and checkers simultaneously.
- Overperformers are also more confident in the conversation with finance about marketing’s impact, at 84 percent against 65 percent.
- On experience, 81 percent focus on eliminating friction and delivering ever-evolving experiences, against 39 percent.
- On culture, 70 percent show diversity in strategic decision making against 45 percent.
- On organization, competitive agility separates the two groups 68 percent to 16 percent, and overperformers report 3.5 times more connections with other functions and 5.5 times more with senior leaders.
- On data, 66 percent put data and analytics at the core of strategic decision making against 36 percent, and 65 percent can attract whole-brain talent against 25 percent.
Where growth comes from
The framing question for a finance audience is put directly: is growth fueled by value extraction or by value creation. The study’s position is that traditional growth formulas are lacking, and that what it takes to win has been updated since COVID struck.
The answer is organized as seven building blocks: abundant markets, multiple models, evolving experiences, open culture, the anticipative organization, whole brained working, and humanized growth itself.
Markets, models and experiences
On abundant markets, the point is where leaders look for reference points. Overperformers are described as thinking about Nielsen, Amazon and Kickstarter, with figures of 27, 11 and 3 percent shown alongside. Mars moving from pet food to pet care is the worked example of a redefined market.
On multiple models, 71 percent of overperformers are willing to accept new business models against 39 percent, and the study’s image for it is playing chess and checkers at the same time. The example is a move from supermarket shelves to cafes and subscription models.
On experiences, overperformers are characterized as always beautifully dissatisfied. Eighty-one percent focus on eliminating friction and delivering ever-evolving experiences, against 39 percent.
Culture and organization
Open culture shows up in who is in the room when strategy is decided: 70 percent diversity in strategic decision making against 45 percent. The cultural indices point the same way. Underperformers index 146 on procedures, structure and quality where overperformers index 62.
The reverse holds on the other two indices. Overperformers index 129 against 93 on innovation, change and entrepreneurship, and 118 against 75 on people, teamwork and collaboration.
The anticipative organization is measured on agility and on connection. Competitive agility splits 68 percent to 16 percent, and the connectivity finding is that overperformers connect horizontally and vertically: 3.5 times more connections with other functions and 5.5 times more with senior leaders.
What humanized growth means for the numbers
The whole brained block is about combining technology with human creativity and unlocking big data with deep human insight. Sixty-six percent put data and analytics at the core of strategic decision making against 36 percent, and 65 percent are able to attract whole-brain talent against 25 percent.
The seventh block is ambition itself. Asked for their number one growth ambition, bottom-line profit indexes 85 and 130 across the two groups, and impact on people indexes 120 and 76. The study’s own reading is that more underperformers focus on the bottom line.
The stakeholder picture is shown as widening. Before COVID the emphasis sat on customers and the capital markets. After it, colleagues and community joined them, and the humanized growth equation multiplies colleague value, customer value, community value and capital market value together against short termism.
The external anchor offered to the finance audience is Laurence Fink of BlackRock, quoted to the effect that to prosper over time a company must not only deliver financial performance but also show how it makes a positive contribution to society, followed by the 2019 US Business Roundtable. An IRG CMO panel is reported showing a significant shift toward more humanized growth, 78 percent against 4 percent.
Scope and limitations
The comparisons throughout are between overperforming and underperforming organizations as the study defines them, and the deck states the sample sizes but not the definition. The base is more than 750 qualitative interviews and more than 5,000 quantitative responses across markets and functions.
Source
This page summarises Humanizing Growth: CFO Forum 2022, by Institute for Real Growth (IRG), 2022.