Most Growth Programs Fail - Part II

Most growth programs fail because they require changes to strategy. And changes to strategy nearly always require changes to the organization: new tasks must be defined, new skills built, a new culture must be nourished and leadership must be aligned up and down the hierarchy. Inattention to these increases the odds that a promising strategy delivers disappointing results.

In addition, many companies aren’t fully aware of how far they must go to differentiate new products or offerings. Effecting these changes requires building commitment on the part of those charged with driving the growth initiative.

Building the necessary commitment begins with the creation of a collective understanding of changes in marketplace dynamics: evolution of customer defined value, technology changes, channel shifts, and new competitive strategies. It strengthens as the team jointly assesses and selects the opportunities, builds a robust strategy and identifies the necessary organizational changes. It solidifies as the team identifies the key elements of a go-to-market plan that creates the platform for sustained performance. And the commitment becomes action through follow-up monitoring.

Most Growth Programs Fail - Part I

The operational efficiency programs that have dominated most organizations during the recession actually erode growth capabilities, according to Betsy Morris (New Rule: Look Out, Not In) who writes in Fortune that of 58 large companies with Six Sigma programs, 91% trailed the S&P following implementation.

Thus, simply identifying changes in the competitive space, brainstorming the “right” opportunities and then demanding performance without changing the business model, the management systems, the cultural inhibitors and leadership mindsets throughout the organization, doom many well-meaning initiatives to mediocrity. The shift to growth as a core competence requires the commitment of everyone involved to explore, select and support new opportunities.

Growth Challenges

Companies seeking a growth agenda face a number of challenges:

• How do we identify big business ideas?
• Do we stay in current markets, creating new portfolios? Do we enter new therapeutic areas?
• How do we launch a growth agenda without losing ground on efficiency gains?
• How do we structure the accountabilities and the incentives to make this a successful initiative?
• How do we change long established mindsets that keep the organization from seeing and acting on new opportunities in the market place?
• How do we launch a growth initiative that has the full ownership of the management team?
• How do we ensure that this exercise goes beyond brainstorming ideas for growth to executing them?
• How do we effectively engage the business developers / sales force in a new initiative?

Which ones do you face?

And what are you doing about them?