This deck was presented at a roundtable in Johannesburg in May 2022. It opens with the question of whether growth is fueled by value extraction or value creation, argues that traditional business growth formulas are lacking, and then works through seven building blocks that separate growth overperformers from underperformers.
The evidence base is the Humanized Growth Study, which combines qualitative interviews, a large quantitative survey, an AI analysis of growth publications, and behavioral analysis of LinkedIn members. It was updated after COVID struck.
Key findings
- Overperformers are more willing to run several business models at once. On willingness to accept new business models the split is 71 percent against 39 percent.
- They are also more confident talking to finance about marketing impact, at 84 percent against 65 percent.
- Experience is treated as never finished. Overperformers embrace what the study calls being always beautifully dissatisfied, and focus on eliminating friction at 81 percent against 39 percent.
- Strategic decision-making is more diverse among overperformers, at 70 percent against 45 percent.
- Overperformers are far better connected inside the organization, with 3.5 times more connections to other functions and 5.5 times more connections to senior leaders.
- The two groups also differ on ambition. Underperformers index high on a bottom-line profit ambition and low on impact on people, while overperformers do the reverse.
Markets and models
The first building block is abundant markets, illustrated by the way overperformers define their competitive set. The example given for moving category boundaries is Mars going from pet food to pet care.
The second is multiple models. The example is the move from supermarket shelves to cafes and subscription models, with the two-game image of playing chess and checkers at the same time.
Culture and the shape of the organization
The open culture block is supported by an index of what each group talks about. Underperformers index at 146 on procedures, structure and quality, against 62 for overperformers.
The pattern reverses on the language of change. Overperformers index at 129 on innovation, change and entrepreneurship against 93, and at 118 on people, teamwork and collaboration against 75.
The anticipative organization block is about competitive agility and a switch of perspective on organizational change, where the gap is 68 percent against 16 percent.
Data and human judgment together
The whole brained block is about unlocking big data with deep human insights. Combining technology and human creativity separates the groups at 65 percent against 25 percent.
Starting with the data shows a similar gap. Overperformers put data and analytics at the core of strategic decision-making at 66 percent against 36 percent.
What COVID moved
The deck contrasts a pre-COVID focus on customers and capital markets with a post-COVID focus on colleagues and community, and argues that humanized growth requires all four at once.
Those four are then expressed as a multiplied value equation, with short termism working against it.
The external markers cited for the shift are Larry Fink’s argument that a company must show a positive contribution to society as well as financial performance, and the 2019 US Business Roundtable statement.
IRG’s own CMO panel reports a significant shift toward more humanized growth, at 78 percent against 4 percent.
Scope and limitations
The percentages compare self-reported attitudes of overperforming and underperforming groups within the study rather than measuring outcomes directly, and the deck states that the underlying study was revised after the onset of COVID.
Source
This page summarises Humanizing Growth, by Institute for Real Growth, WPP, 2022-05-19.