How can leaders foster controlled growth across their organizations, instead of the all-too-often cycle of initial growth followed stagnation and decline?

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Accepted Answer

Business leaders are all too familiar with the cycle of growth, stagnation, and decline. These three phases have become so common that some are beginning to believe they are inevitable. However, at Kearney, we believe that stagnation and decline can be avoided. This then raises the question of what causes this cycle, and how can it instead be replaced with continuous growth?In most cases, companies will experience initial success after the development of a novel product or service. As a first mover, they are able to stake their claim in the market, typically experiencing exponential growth and obtaining a large market share. However, as other firms follow suit and competition begins to increase, this forces the company to look elsewhere for an advantage - whether that be through continued product development or entering a new market. While good intentioned, these efforts aren't always rooted in a targeted and focused strategy, exposing them to silos and operational inefficiencies. This can cause other issues to arise, many of which lead to eventual stagnation and decline.Knowing that most firms fall victim to stagnation as a result of an incongruous strategy, what can be done to prevent this? The answer: targeted simplification. Through targeted simplification, leadership teams can transform their business and focus on high growth opportunities. To do this, firms need to develop a clear and cohesive strategy that reflects their goals. Once they have this strategic vision, leaders are able to invest in the people, products, and processes that align with firm objectives rather than those that hinder their growth potential. In doing so, companies can create space and energy for their most impactful assets and lay the foundation needed for controlled growth. This mentality must continuously be used to identify new investment and expansion opportunities that complement their existing portfolio. Whether this be through internal research and development or external mergers and acquisitions, leaders should view all opportunities through the targeted simplification lens and decide if the expansion aligns with their core strategy.Targeted simplification is as much about identifying growth enablers as it is about eliminating growth inhibitors. Consider the axiom “addition by subtraction”. When you eliminate non-strategic potions of your portfolio, replace individuals not on board with the vision, and exit regions that are not part of the future strategy, you are harnessing targeted simplification to focus your business on high growth opportunities. By taking the time to create a clearly defined strategy, business leaders can generate controlled growth and avoid many missteps that could've restarted the cycle of stagnation. Using targeted simplification for identifying expansion opportunities will aid in ensuring long-term sustainability for your business.To learn more about other ways to achieve positive growth, please read "How to get 'good growth'" here as well as our article on “Lessons learned from prescriptive burning” here.{ "@context": "http://schema.org/", "@type":"QAPage", "mainEntity": { "@type": "Question", "name":"How can leaders foster controlled growth across their organizations, instead of the all-too-often cycle of initial growth followed stagnation and decline?", "text":"How can leaders foster controlled growth across their organizations, instead of the all-too-often cycle of initial growth followed stagnation and decline?", "answerCount":"1", "upvoteCount":"10", "dateCreated":" 2020-03-23", "author": { "@type": "Person", "name": "Ben T. Smith IV" }, "acceptedAnswer": { "@type": "Answer", "text": "Business leaders are all too familiar with the cycle of growth, stagnation, and decline. These three phases have become so common that some are beginning to believe they are inevitable. However, at Kearney, we believe that stagnation and decline can be avoided. This then raises the question of what causes this cycle, and how can it instead be replaced with continuous growth? In most cases, companies will experience initial success after the development of a novel product or service. As a first mover, they are able to stake their claim in the market, typically experiencing exponential growth and obtaining a large market share. However, as other firms follow suit and competition begins to increase, this forces the company to look elsewhere for an advantage - whether that be through continued product development or entering a new market. While good intentioned, these efforts aren't always rooted in a targeted and focused strategy, exposing them to silos and operational inefficiencies. This can cause other issues to arise, many of which lead to eventual stagnation and decline. Knowing that most firms fall victim to stagnation as a result of an incongruous strategy, what can be done to prevent this? The answer: targeted simplification. Through targeted simplification, leadership teams can transform their business and focus on high growth opportunities. To do this, firms need to develop a clear and cohesive strategy that reflects their goals. Once they have this strategic vision, leaders are able to invest in the people, products, and processes that align with firm objectives rather than those that hinder their growth potential. In doing so, companies can create space and energy for their most impactful assets and lay the foundation needed for controlled growth. This mentality must continuously be used to identify new investment and expansion opportunities that complement their existing portfolio. Whether this be through internal research and development or external mergers and acquisitions, leaders should view all opportunities through the targeted simplification lens and decide if the expansion aligns with their core strategy. Targeted simplification is as much about identifying growth enablers as it is about eliminating growth inhibitors. Consider the axiom “addition by subtraction”. When you eliminate non-strategic potions of your portfolio, replace individuals not on board with the vision, and exit regions that are not part of the future strategy, you are harnessing targeted simplification to focus your business on high growth opportunities. By taking the time to create a clearly defined strategy, business leaders can generate controlled growth and avoid many missteps that could've restarted the cycle of stagnation. Using targeted simplification for identifying expansion opportunities will aid in ensuring long-term sustainability for your business. To learn more about other ways to achieve positive growth, please read "How to get 'good growth'" here as well as our article on “Lessons learned from prescriptive burning” here..", "dateCreated": "#qaAcceptDate", "upvoteCount": 1, "url": "Business leaders are all too familiar with the cycle of growth, stagnation, and decline. These three phases have become so common that some are beginning to believe they are inevitable. However, at Kearney, we believe that stagnation and decline can be avoided. This then raises the question of what causes this cycle, and how can it instead be replaced with continuous growth? In most cases, companies will experience initial success after the development of a novel product or service. As a first mover, they are able to stake their claim in the market, typically experiencing exponential growth and obtaining a large market share. However, as other firms follow suit and competition begins to increase, this forces the company to look elsewhere for an advantage - whether that be through continued product development or entering a new market. While good intentioned, these efforts aren't always rooted in a targeted and focused strategy, exposing them to silos and operational inefficiencies. This can cause other issues to arise, many of which lead to eventual stagnation and decline. Knowing that most firms fall victim to stagnation as a result of an incongruous strategy, what can be done to prevent this? The answer: targeted simplification. Through targeted simplification, leadership teams can transform their business and focus on high growth opportunities. To do this, firms need to develop a clear and cohesive strategy that reflects their goals. Once they have this strategic vision, leaders are able to invest in the people, products, and processes that align with firm objectives rather than those that hinder their growth potential. In doing so, companies can create space and energy for their most impactful assets and lay the foundation needed for controlled growth. This mentality must continuously be used to identify new investment and expansion opportunities that complement their existing portfolio. Whether this be through internal research and development or external mergers and acquisitions, leaders should view all opportunities through the targeted simplification lens and decide if the expansion aligns with their core strategy. Targeted simplification is as much about identifying growth enablers as it is about eliminating growth inhibitors. Consider the axiom “addition by subtraction”. When you eliminate non-strategic potions of your portfolio, replace individuals not on board with the vision, and exit regions that are not part of the future strategy, you are harnessing targeted simplification to focus your business on high growth opportunities. By taking the time to create a clearly defined strategy, business leaders can generate controlled growth and avoid many missteps that could've restarted the cycle of stagnation. Using targeted simplification for identifying expansion opportunities will aid in ensuring long-term sustainability for your business. To learn more about other ways to achieve positive growth, please read "How to get 'good growth'" here as well as our article on “Lessons learned from prescriptive burning” here.", "author": { "@type": "Person", "name": "Ben T. Smith IV" } } } }