Thursday, May 14, 2009

The Six Keys to Organic Growth. Grow Marketshare From Within for achieving Sustainability and Competitive Advantage.

Companies worked hard on creating a consistent, seamless, self-reinforcing internal system that drove certain value-creating organic growth behaviors. Organic growth is more than a strategy—it is an internal system. Here are The Six Keys to Organic Growth:

1) An Elevator-Pitch Business Model
Companies have a simple, easy-to-understand strategy and business model that can be explained to and understood by line employees. They also stay focused, are disciplined, and “stick to their knitting” rather than pursue complex diversification strategies. And they evolve through incremental improvement. Big innovations, new business models, and changing industry dynamics or rules are not prevalent. They keep it simple and focus on growing the business incrementally.

2) Instill a “Small-Company Soul” Into a “ Bigcompany Body”
The second key is to be entrepreneurial at the point of customer contact. Companies give employees the power to act to meet customer needs, while having strong central controls over quality, supplies, finance, etc. It is critical giving people with customer contact the authority, power, responsibility, and accountability for results. Companies push “ownership” of the customer down into the organization. And they successfully manage the paradoxes and tensions between entrepreneurship and central control. These companies structure themselves to promote entrepreneurial “ownership.”

3) Measure Everything
Winners are measurement maniacs. They measure not only financial metrics but also key operational metrics (most daily) and behaviors. Metrics are necessary, but they become more value-creating when they are aligned with accountability and rewards. Metrics objectify employee performance and reduce corporate politics and favoritism. Companies do make mistakes. But because of their information and measurement systems, they know about them quickly and can make corrections quickly. They are resilient. They use metrics to give employees frequent feedback and therefore can reduce variances or exceptions.

4) Build a People Pipeline
The companies have engaged, loyal employees and build a multilayered talent pool. They obtain consistently superior performance from line employees on a daily basis and have above-average employee loyalty and retention rates compared with industry averages. And they get this engagement without sacrificing accountability, standards, or quality. In most of these companies, employees are treated fairly and with dignity and respect. Highgrowth companies generally create an environment of stability—regarding strategy and leadership—and emphasize iterative, be-better activities rather than largescale metamorphoses. This macro stability allows the companies to promote from within, giving their employees defined career paths. Employees in these companies “own” their results and their careers, and most even own part of the company. These companies’ management teams are frequently home grown, with long company tenures. Elitism is also rejected in these companies—the trappings of imperial or regal CEOs are absent. For example, Best Buy, Walgreen, and Tiffany & Company have no corporate jets or executive dining rooms.

5) Leaders: Humble, Passionate, Focused Operators
Organic growth companies typically are led by humble, passionate, internally focused operators. The majority of these CEOs are not self-absorbed. They know their success is due to the work of others. Few CEOs came from elitist or privileged backgrounds—most were educated at state schools. Most are operators—engineering types. These leaders fight arrogance and complacency in themselves and their organizations. They are focused on the business—on the operations and on their many be-better initiatives.

6) Be an Execution and Technology Champion
Winners do not have better strategies than the competition. Most do not even have unique products or services. What they do better every day is execute. These companies have engineering-processed most of their value chain and, through technology, have become very cost efficient, productive, and knowledgeable about what is going on inside their companies.
They are into the minutia—high standards (99 percent error-free is the norm). These companies know that they are only as good as their last delivery and that they earn their customers one transaction at a time. These companies use technology to drive efficiencies across their value chain. To them, technology is not a service function; it is an operational function. As such, technology professionals are integrated into functional areas in many of these companies.



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