A recent study identified 10 key business practices that must be present for business to achieve internal growth.
The study, conducted by New York-based Mercer Delta Consulting, sampled companies that have grown more than three times as fast and maintained stronger profit margins than other companies they were compared to between 2000 and 2004.
A set of 10 practices statistically differentiated the growth companies from other companies examined for the study:
- Create clarity about the markets or businesses from which growth will come.
- Articulate a clear profit model that is well understood by managers.
- Focus the whole business on a few initiatives.
- Engage in disciplined execution, at all levels in the organization, on growth initiatives.
- Translate customer insights into new offerings and/or business improvements.
- Promote excellence in execution.
- Maintain strong feedback loops to identify what is/isn’t working.
- Make smart decisions about which opportunities invest in.
- Place company leaders around growth initiatives.
- Foster leadership tendencies among workers from within the company.
“It is clear that some companies are focusing on activities that, while theoretically important, are not the right seeds to sow for organic growth,” says William Pasmore, a partner with Mercer Delta. “In fact, [business leaders] should avoid certain actions or at lest approach them with caution. Better still, by redirecting their resources into the 10 areas above, which are contingent upon and leverage one another, a company can successfully propel itself towards its growth goals.”
In addition, successful growth is not dependent on company size, according to the study. What sets growing companies apart is their ability to implement these particular business practices in conjunction with one another and to pursue the practices with a greater level of intensity than other companies.