Recent surveys indicate that a key goal of many companies is ‘growth’. But while most will have carefully developed their market strategy for achieving growth, few will have understood how they are actually going to deliver the growth – or even whether they are fit for the task.
Most businesses will know the type of growth they are seeking – profits, earnings, market share, shareholder value and so on. They will also know where this growth will come from – for examples, acquisition, market growth, new products or new markets. But many fall at the next hurdle: they announce the strategy, set the targets and then simply expect the organisation to rise to the challenge.
Organisations are complex networks of people, processes, systems and infrastructure bound together by formal and informal rules and deeply embedded practices that work to deliver a certain kind of behaviour and a particular level of performance. Any given network may simply be incapable of delivering the kind of growth the company is looking for.
Unless it has been carefully ‘tuned’ for growth, a company is probably design to deliver the business goals of the past or, even worse, it may simply be driven but the requirements and expectations of managers and staff.
Expecting a company to spring into growth would be like believing a family saloon will perform like a racing car just because you put your foot down. It may speed up, but sooner or later the acceleration will fail or the driver will lose control.
To deliver successful and sustained growth, you have to create an organisation specifically designed and motivated to grow – and you do this by putting in place practical organisational enablers of growth and by designing a new operating model that re-tunes the business to succeed in those activities that growth depends on.
Practical organisational growth enablers
Does the organisation have the capacity and capability to grow?
For example:
- Are all relevant budgets set to allow growth, manage the investment risk, reflect short-term impacts and focus on cash and borrowing on the key growth needs?
- Is the extra factory, storage and inventory capacity available?
- Is the wider supply chain capable of supporting growth?
- Have the potential people or skill implications of the growth been assessed and the mechanisms set-up to develop or recruit scarce resources as the organisation grows?
- Is the right management information in place to monitor growth and governance and take fast decisions to optimise the potential for delivering growth?
Designing the organisation to deliver sustainable growth
In practice, growth depends on individuals, teams and business units taking the right action and making the right decisions. Creating the right operating model is about making these actions and decisions easy and obvious for all involved.
If the strategy aims to radically change the performance of the organisation, the organisation will need to significantly change the way it works. But precisely how it needs to change will depend on the specific growth strategy that any individual business pursues.
Regardless of the business and market sense behind any growth strategy, delivering the hard results will depend on the ability of the business to change its behaviour and work in new ways – and this in turn depends on designing an organisation that has the capability and incentives to respond to the growth challenge.
