Why is creating sustainable, market-leading growth so difficult? In his book, Good to Great, Jim Collins had to scour over 1,000 companies to find just 11 who had made the leap. And of the top 100 US firms from 1917 only one, GE, outperformed the market over the subsequent 80 years, while over 60 had ceased to exist.
For companies to achieve and sustain high-growth they need both a clear growth strategy and an organisation capable of delivering game-changing innovation. Yet, these two characteristics alone are not sufficient. The missing characteristic is a high-growth mindset.
Mindsets are shaped by our attitudes, beliefs and assumptions and so we do not normally notice them. They are the air we breathe.
It is only when we stand back and review our mindset that we can understand and then change it. Like a football team who are tactically astute, have players with great skill, but who are languishing at the bottom of the league, it often requires a change of manager to give the team a new attitude and belief before they begin to achieve better results.
There are three elements that distinguish the mindsets of high growth companies:
- A focus on tomorrow. High-growth companies are leaders, not followers. Rather than simply protecting their position and maximising short-term profits, they continuously want to beat the competition to the next big win. Apple, for instance, has regularly delivered new iPods that have both better features and lower prices in order to maintain their market leadership, and they are now applying this approach to their iPhone.
- A commitment to action and learning. High-growth companies will certainly plan, but match their planning ability with their ability to act, learn and improve at pace. Amazon.com, for example, has transcended the dot.com boom and bust cycles by continuously developing, testing and delivering new benefits for customers. CEO Jeff Bezos calls the company’s focus on action “The institutional YES!” and adds, “People say ‘We’re going to do this. We’re going to figure out a way.’”
- An acceptance of risk. High-growth and high-returns are inevitably associated with higher risks. High-growth companies understand and accept the risks of growth: they are risk-seeking, not risk-avoiding. For example, Dove’s ‘Campaign for Real Beauty’ has transformed the brand through innovative brand initiatives that have challenged conventional wisdom about the nature of beauty. In hindsight it seems an obvious approach, but, when it was launched, it was anything but.
The bottom line
Without a well-established, high-growth mindset any ambition you have to lead your market is likely to be little more than hubris.What can you do to help your organisation develop a clearer focus on tomorrow, a stronger commitment to action and a greater willingness to seek out higher-risk, higher-return opportunities?
To find out more contact Stuart by clicking here or call +44-(0)1636-526111.