This is an early preview of the Initiative for Real Growth’s findings, presented in New York in January 2018. The case for the research is that traditional business growth formulas are failing: geographic expansion is running out of steam, barriers to entry are disappearing, better informed consumers are more demanding, and established players are losing out.
The findings are organized as seven building blocks across three layers: what the company brings to market, how it is organized, and why it does what it does. Each block is introduced by a myth the evidence contradicts.
Key findings
- The research base is 586 vision interviews across 15 markets, more than 1,000 online survey respondents, and an AI meta-analysis of published work on growth.
- The pressure on marketing is stated plainly: marketing gets blamed when growth is lacking, and average CMO tenure is only 25 months.
- Eighty-two percent of overperformers assess and understand market developments, against 45 percent.
- Sixty-four percent deliver ever-evolving experiences against 21 percent, the widest experience gap in the preview.
- Sixty-eight percent effectively remove internal barriers, against 17 percent.
- On ambition, under and overperformers focus on top-line growth equally. Underperformers focus twice as much on the bottom line, and overperformers twice as much on the people they serve.
Why a new growth model
The growth challenge is described as a set of pressures arriving at once. Geographic expansion is exhausted, barriers to market entry are disappearing, consumers are better informed and more demanding, established players are losing out, and even disrupters are being disrupted.
The social pressures run alongside the commercial ones. Corporate values are becoming more transparent, employees are increasingly mobile, consumers are conscious of societal impact, and the license to operate is being challenged. Growth without strategic focus is presented as a danger rather than an achievement.
What the company brings to market
The first myth is that growth is about winning market share from competitors. The evidence points the other way: underperformers focus mostly on growing market share, at 55 percent against 40, while 59 percent of overperformers focus on category growth and beyond, against 42 percent. Overperformers also make big bets and stay consistent with them, at 71 percent against 39.
The second myth is that growth is all about increasing customer satisfaction. Overperformers instead embrace being always beautifully dissatisfied, and 64 percent deliver ever-evolving experiences against 21 percent, focusing on eliminating friction. The examples run from hotel rooms becoming full-service business travel solutions to car financing becoming mobility data solutions.
The third myth is that anything not fitting the ROI model will be killed by the spreadsheet mafia. Sixty-seven percent of overperformers are willing to accept new business models against 43 percent, playing chess and checkers simultaneously across industries, verticals and cultural segments, both by acquisition and home-grown.
How the company is organized
The fourth myth is that the problem is a shortage of data and analytics. Overperformers unlock the value of data with deep human insight and creativity: 69 percent can attract whole-brain talent against 27 percent, 67 percent put data and analytics at the core of strategic decision making against 37 percent, and 73 percent build data-led creative experiences against 32 percent.
The fifth myth is that agile just forces a redefinition of who is responsible for what. The evidence is about barriers and connection: 64 percent competitive agility against 27 percent, 68 percent effectively removing internal barriers against 17, 67 percent internal connectivity against 35, 71 percent marketing and sales collaboration against 48, and 71 percent external connectivity against 46. Haier and Go-Jek are the worked examples, both organized around small entrepreneurial micro-battle teams.
The sixth myth is that culture cannot be changed because it is in the DNA. Overperformers rewrite the culture script: 48 percent against 29 on a culture of people, change, entrepreneurship, innovation and teamwork, and 62 percent against 43 on the ability to bring diversity into strategic decision making. The practices named include rewarding employee ownership behaviors and welcoming outsiders in order to change the company.
Why the company does what it does
The seventh myth is that the objective is to boost profitable growth. Top-line growth is the number one ambition for both groups equally, so it distinguishes nobody. Underperformers focus twice as much on the bottom line, while overperformers focus twice as much on the people they serve: clients, colleagues and their communities.
Haidilao is the example of putting people first, beginning with meaningful employee care and resulting in excellent customer care. Cisco is the example of a transformation from profit to people, held together by a simple and shared ambition it calls the people deal.
The leadership section describes the trajectory the role has to take: beyond advertising and the shiny digital toys that distract, back to marketing basics and business growth, into a business growth role and even a societal leadership role. The closing quotation is that only businesses that help people and planet thrive will succeed, and that impact has to be scaled through partnership, collaboration and trust.
Scope and limitations
This is a preview of findings rather than the full study, presented in January 2018. It rests on 586 vision interviews in 15 markets and more than 1,000 online survey respondents, and compares overperformers with underperformers as the research defines them.
Source
This page summarises Preview of Findings, by Marc de Swaan Arons, January 16, 2018.