By Dhirendra Kumar, Ph.D.
Growth strategy is a holistic model for leading an enterprise for total excellence by focusing on the needs of the customer. The model stresses excellence in all aspects of the enterprise: organizational, product and operational, service, and people. To achieve growth strategy in a global economy, all aspects must work collaboratively. A visionary plan should incorporate people, product, processes, resources and technology. Customers are very demanding – expecting on-time delivery of quality products/services at low prices.
Some of the key elements of growth strategy are:
- Support markets and products growth
- Acquire new or expand business
- Improve margin
- Increase revenue and profitability
- Reduce business cycle time
Business leaders and associates have to partner in order to focus on the needs of the customer and optimize the existing activities in the process. These processes include safety, quality, productivity, resource development, cost, etc. Businesses must find a balance between passion, people, and patience by studying the facts so as to fully grasp the situation. It is very important for businesses to understand their place as either within a state of sustainability or growth. It requires mutual trust and respect between business leaders, their associates, and most importantly, their customers. Understanding the status of an enterprise is the key for success.
Enterprise growth is concerned with how the enterprise plans are executing the fundamental changes whether the enterprises are small or large and private or public. These changes may involve new or changed relationships to markets/customers or constituencies or different/new product and service offerings, and competitive pressures to reduce prices, increase quality, and improve services. Some of the examples are Southwest Airline and Toyota. Growth concept is not a new phenomenon; however, it is new and unusual for various industries in this global competition to plan and execute such a complex and multi-disciplinary problem area.
Enterprise growth calls for more than superficial change. These changes can be in response to marketplace events or to address underperformance, but enterprise growth is quite different from a company’s turnaround in financial difficulties. It will inevitably be the biggest single internal program that any enterprise undertakes. It is expected to disrupt the existing business model. There are several questions that have to be answered during development and execution of enterprise growth, such as –
- What must enterprise do to grow?
- What do leaders transform?
- What product, market, and/or service they need to grow?
- What are the vital signs that growth is underway?
Enterprise growth is a C-level (CEO, CFO, business president, etc.) leadership initiative towards corporate growth and/or renewal, constituting a range of competitive strategies impacting the key elements of an enterprise thus resulting in a sustainable competitive advantage.
The above definition includes but is not limited to, leadership’s participation and objective of attaining:
- Substantial process improvements
- Solution/Product/Service growth
- Competitive advantage
- Financial benefits
- Sustainability and growth of market leadership through a process of renewal and revitalization.
The execution of these strategies is to bring about transformational results. The examples are Airbus, Toyota, Wal-Mart, and so on. The following are the key characteristics where enterprise growth is the best strategy –
- When C-level and executive leadership are required to be involved.
- Where primary aspects of enterprise are usually impacted.
- When basis of enterprise competition has changed.
- When overall performance needs to be enhanced, renewed and sustained with leadership in marketplace.
- When drastic increase in market share and/or market responsiveness is required.
Growth strategy goal tends to significantly differentiate initiatives. The approach, and the resources utilized for business growth, relates to both the goal pursued and the nature and competencies of the enterprise.
So, what are the key achievements of enterprise growth?
The achievements in enterprise growth can range from greater cost efficiencies, improved market perceptions, fundamental changes to markets, to new product and service offerings. There may also be significant upgrades in skills, technology, and in business strategies. The scope of enterprise growth can also range from operations activities, to business functions, to overall organization, to the enterprise as a whole. For example, Duncan Donut stores sell sandwiches but are still known as donut shops, IBM’s business concentration moved from computers and servers to providing integrated technology services, Honda’s business from motorcycles and automobiles to commuter planes.
It is important to note that successful enterprise growth is likely to require significant investments in skills, processes, organization, and technology. Enterprise growth initiatives may be driven by external opportunities which will force the development of strategies such as targeted market (emerging markets or pursuing vertical market), value proposition (providing integrated solution), product/service offerings (changing the products and services provided).
Therefore, the need for enterprise growth entails a fundamental change in the way enterprises are started everyday; some flourish. Those that succeed eventually must face the challenges of change; some succeed in enterprise growth strategy. Most enterprises fail to transform/and/or grow.