Growth through Focus: A Blueprint for Driving Profitable Expansion

Rather than seek increased revenues and profits by expanding products and markets, companies should follow a seven-step strategy for achieving more with less.

by Sanjay Khosla and Mohanbir Sawhney

Illustration by Philippe Lardy

Faced with economic headwinds, many global corporations are struggling to grow their businesses profitably. In the consumer packaged goods business, for example, the worldwide recession has hurt premium brands as consumers have traded down to cheaper brands, private labels, or generics. In the retailing business, same-store sales are flat or declining for numerous companies. Meanwhile, many business leaders continue to seek growth by extending their existing product lines and brands, as well as by entering new geographic regions. After all, growth is supposed to be about “more” — more products on the shelf, more categories, more brands, and more markets.
However, this approach is exactly the opposite of what business leaders should do to drive increased revenues and profits. A typical “growth through more” strategy diffuses the organization’s efforts. It increases the complexity of the organization and its operations. We have found that “growth through less,” or more precisely “growth through focus,” is the best prescription for growth, regardless of the economic environment. This conclusion is based on our own experience in three well-known companies — Kraft Foods, Unilever, and Fonterra Brands (a dairy products business based in New Zealand) — on three continents over 10 years. In all three cases, a deliberate strategy of focusing on a few markets, brands, and categories produced impressive revenue and profit expansion. We have learned that seemingly mature businesses can be energized by making fewer but larger bets and by focusing relentlessly on executing a simple but powerful vision.
Growth through focus is not as easy as choosing what strategic bets to make. Rather, it requires the leadership team to follow a systematic approach that spans everything from strategy and vision to execution and measurement. We propose a framework that consists of seven steps that an organization must go through in its quest for growth through focus. Our framework is grounded in three key ideas: focus in strategy, simplicity in communication, and empowerment in execution.........

2011 Hiring Outlook

2011 Hiring Outlook

By Ilya Leybovich

 

Although 2010 was a year of economic recovery, employment conditions continue to lag and millions of Americans still struggle to find work. Will hiring prospects in the new year provide a light at the end of the tunnel?
Following a difficult two-year period of mounting job losses, unemployment conditions in the United States bottomed out in 2010. But while the general economy has been recovering from the economic downturn, the job market has remained volatile and the national unemployment rate has hovered just below the 10-percent mark for most of the year. With millions of Americans still struggling to find work, the hiring outlook for 2011 will determine whether this will be a jobless recovery or not...

What Manufacturers Expect in 2011

What Manufacturers Expect in 2011

By David R. Butcher

The nation's manufacturing sector has held up better than other sectors during an uneven economic recovery and is expected to continue expanding. Economic forecasters and business leaders are boosting their year-end and 2011 estimates for United States growth, prompted by higher demand and increased production. Moreover, manufacturers are more optimistic about an economic uptick for their businesses in 2011, according to a spate of new data....

The Innovator’s Toolbox: Empowering the Next Wave of Difference Makers

The Innovator’s Toolbox: Empowering the Next Wave of Difference Makers

Building a Best-run Finance Organization: A New Role to Address Today’s Business Realities

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There is a company executive with a growing influence in today’s boardroom – the chief financial officer. And the role of the finance organizations that these executives lead is expanding as well.
While the advent of the Sarbanes-Oxley Act has focused enormous attention on the financial accountability and internal controls of companies across all industries, company executives recognize that individual business activities do not occur in a vacuum. All functions – such as sales, marketing, manufacturing, service, and even human resources – affect not only the bottom line but also a company’s financial integrity. Increasingly, prudent companies are drawing their finance organizations into greater collaboration with the operational aspects of the enterprise. Moreover, companies are asking their financial officers to take on a more prominent role in defining company strategy.
This SAP Executive Insight examines the changing role of the finance organization in today’s business environment. Further, by answering the following questions, it describes how companies can develop best-run finance organizations:

• What operating characteristics help companies develop best-run finance organizations?
• How do you measure a best-run finance organization?
• How does the focus of an organization change as bestrun finance methods are applied?

Executive Agenda At a Glance...

Customers at the Forefront of Strategic Planning

Customer Strategist Orkun Oguz: Place Customers at the Forefront of 2011 Strategic Planning

from Strategy Speaks: a Peppers and Rogers Blog by Customer Strategist

 

Many executives are in the throes of the budget season, so their discussions with other decision-makers will invariably turn to strategy setting for the coming year. Given the current backdrop - a sluggish economy, the need to manage growing complexity in the multichannel environment, and increased opportunities for using customer data and analytics - executives should be thinking about growing their businesses through customer-centricity.
As companies set their revenue targets and other financial goals, executives can chart their strategies in a couple of different ways. They can choose to apply a short-term, product-centric approach that might enable them to meet their quarterly earnings targets. But in doing so, senior management runs the risk of alienating loyal customers by applying aggressive sales tactics in the drive to meet their numbers.
By comparison, a customer-centric method of strategy setting is a more balanced approach to engendering long-term customer value while driving greater loyalty and consistent revenue growth in the near term. In addition, a customer-centric approach will help companies to foster gains in customer lifetime value and customer profitability over the long haul.

How blue are the oceans? The Starwood experience

Robyn Pratt, Starwood An INSEAD article In search of blue oceans: The Starwood experience asks: Are companies using Blue Ocean Strategy to search for ‘uncontested market space’ and, if so, how? One group which has been exploring blue ocean thinking for the past three years is Starwood Hotels and Resorts. Jens Meyer In conjunction with Meyer, the company has developed a process through which employees are trained in Blue Ocean Strategy, effectively focusing on non-customers, before being given three to four months to apply the methodology. Projects are then proposed to the senior operating team at a so-called ‘Visual Strategy Fair’; black belts or master black belts then put together a business case to present those projects to the senior leadership team for a decision on whether to implement these.

Thinking Ahead Visions: Overhauling the Global Financial System

Rethinking global financial systems A radical rethink of the structure of the global financial markets and greater cooperation of the major regulatory bodies are paramount, said the heads of major financial institutions at the World Knowledge Forum in Seoul. Speaking at the World Knowledge Forum, Douglas Feagin, head of Goldman Sachs’ financial institutions group for Asia, believes that reforms of the financial services sector are crucial in restarting economic growth in the US, Europe and the rest of the world. Douglas Feagin Pointing to the bubbles in key asset classes, “unclearly unsustainable” leveraging in the financial systems, and poorly understood and managed derivative securities, Feagin says: “We are going to have to have a change across all these areas – the asset price bubbles, deleveraging and reform of the fundamental securities markets – in order to have a basis to restart economic growth.” Meanwhile, fears of a global recession continue to weigh heavily on financial markets around the world, even as many individual countries – such as Australia, Japan, South Korea, Singapore, Kuwait and Saudi Arabia – have announced new financial and regulatory measures to shore up their financial systems and currencies, and boost confidence...

What the Experts Say: Skills for Tomorrow's Leaders

Skills for Tomorrow's Leaders In this symposium at the Harvard Business School, expert thinkers gathered to investigate what is necessary today to develop the leaders we need for tomorrow. Featuring: Angel Cabrera, President, Thunderbird School of Management Bill George, Professor, Harvard Business School and former Chairman and Chief Executive Officer of Medtronic Daisy Wademan Dowling, Executive Director, Leadership Development at Morgan Stanley Andy Zelleke, Lecturer in Public Policy, Harvard Kennedy School Batia Mishan Wiesenfeld, Professor, Leonard N. Stern School of Business, NYU Evan Wittenberg, Head of Global Leadership Development, Google, Inc. Dr. Ellen Langer, Professor, Harvard University Scott Snook, Associate Professor, Harvard Business School and retired Colonel, US Army Corps of Engineers

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Culture Change: Summary of Key Thinkers' Ideas

Culture Change Summary of Key Thinkers' Ideas This is the result of an extensive set of discussions among a group of organization development consultants and internal HR staff under the auspices of the Change Affinity Group of the New Jersey Human Resource Planning Society.  Key Questions for Discussion: What is culture change?  What are the major models? What is the role of executive management in culture change? What is the role of HR in culture change? What works and doesn't work in culture change?

IF one is going to change an organization, one needs to know what to change towards

Built To Last - Summary of Key Points Written by James Collins & Jerry Porras About this book: This summary of Built to Last is included because if one is going to change an organization, one needs to know what to change towards. This book is one of the best we know of that answers that question. It is one of the best pieces of research done on why certain organizations are more successful over time than others.  Introduction: The book makes a comparison of Visionary Companies to a comparison group of good companies. The lessons of the Visionary Companies can be learned and practiced at all levels of the organization.  What is a Visionary Company? For the purpose of this study they: were the premier leader in their industry, widely admired made an indelible mark on the world have multiple products and have had multiple CEO's are at least 50 years old The authors compared 18 Visionary Companies to 18 comparison companies. The comparison companies have done more than twice as well as the stock market since 1926, while the Visionary Companies have done 15 times as well as the stock market. The comparison is through the end of 1990. Think of the comparison companies as the bronze medalists. Most of the Visionary Companies have had problems, but have displayed a remarkable resiliency in overcoming business challenges.

How Do You Compare to Visionary Companies?

How Do You Compare to Visionary Companies?   Exercise  In a change effort, the exercise can be used to stimulate discussion. In management development programs, this is a good exercise to use to get people thinking about what constitutes organizational excellence. Compare your company on each of the key concepts developed in the all time classic diagnostic tool Built to Last.

A Model Framework of the Change Process

The model below is eclectic, drawing on many of the best thinkers in the field of change management: William Bridges, John Kotter, Kurt Lewin, Tom Peters, and Douglas Smith, among others.   There are many models of change; Richard M. DiGeorgio and Associates employs a variety of models to help clients understand and address change.	To download a full size hardcopy version of the Change Model click here    Click here to download Change Management Bibliography. O2ibm Visit this Open Forum

The Fivefold Agenda of the Enterprise of the Future

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Visit this group According to IBM Global CEO Study titled “The Enterprise of the Future”. “Disruptive by Nature” is the fourth of the five characteristics that define the Enterprise of the Future. Business processes, as well as some products and services, are becoming more virtual. New delivery channels and electronic methods of distribution are overturning traditional industry conventions. And these advances are not just changing the way individual companies work — they’re creating entirely new industries according to the survey. Bottom line is simple. If the company is not ‘disruptive by nature’ it will be very difficult avoid commoditizing of its products or services. Future organizations cannot just capitalize on existing product advantage they possess. They need to continually look for ways to disrupt their own products and services. If they are not willing to do it, it’s quite likely that their competitors will be working on those products substitutes.  According to the study, The Enterprise of the future is: 1) Hungry for change: The Enterprise of the Future is capable of changing quickly and successfully. Instead of merely responding to trends, it shapes and leads them. Market and industry shifts are a chance to move ahead of the competitions 2) Innovate Beyond Customer Imagination: The Enterprise of the Future surpasses the expectations of increasingly demanding customers. Deep collaborative relationships allow it to surprise customers with innovations that make both its customers and its own business more successful. 3) Globally Integrated: The Enterprise of the Future is integrating to take advantage of today’s global economy. Its business is strategically designed to access the best capabilities, knowledge and assets from wherever they reside in the world and apply them wherever required in the world. 4) Disruptive by Nature: The Enterprise of the Future radically challenges its business model, disrupting the basis of competition. It shifts the value proposition, overturns traditional delivery approaches and, as soon as opportunities arise, reinvents itself and its entire industry. 5) Genuine, Not Just Generous: The Enterprise of the Future goes beyond philanthropy and compliance and reflects genuine concern for society in all actions and decisions

The Enterprise of the Future: Disruptive by Nature

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Visit this group CEO s can no longer afford to invest money and scarce management resources in activities that are not differentiating: they intend to specialize. While 38 percent of CEO s plan to keep work within their organizations, 71 percent — nearly twice as many — plan to focus on collaboration and partnerships. Pursuing more collaborative models to gain efficiencies, fend off competitive threats and avoid commoditization. Their end goal is to offer customers a differentiated value proposition according to IBM Global CEO Study titled “The Enterprise of the Future”. Business processes, as well as some products and services, are becoming more virtual. New delivery channels and electronic methods of distribution are overturning traditional industry conventions. And these advances are not just changing the way individual companies work — they’re creating entirely new industries according to the survey.	If the company is not ‘disruptive by nature’ it will be very difficult avoid commoditizing of its products or services. Future organizations cannot just capitalize on existing product advantage they possess. They need to continually look for ways to disrupt their own products and services. If they are not willing to do it, it’s quite likely that their competitors will be working on those products substitutes.

The Pedigree of Emerging Leaders

Key points for spotting emerging leaders: individuals who consistently deliver ambitious results for the company individuals who consistently demonstrate the ability to grow, adapt, and be more flexible than their other top performing peers individuals who ask for opportunity and expand their capacity of operation and influence individuals who take things to the next level (ie: imagination, creativity, product futures etc) individuals who have strong powers of observation, judgment, reactions that are spot on, and EQ individuals who are clear thinkers and have a point-of-view that may be counter to the trend, and finally individuals who ask questions that are insightful that get the thought process into a creative frenzy. O2ibm

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Strategy Execution in times of Uncertainty

In this unpredictable economic climate, leaders must be capable to lead their companies to quickly adapt to new market forces. Business models are changing to catch up with the emerging drivers of competition. Success hinges first and foremost on "Thinking-Ahead" strategy  and robust execution. Because execution plays such a critical role in success or failure, especially during a crisis, many companies are turning to new technology solutions to ensure they can deliver on strategies and emerge even stronger. Any company that fails to adapt quickly and efficiently to market changes can miss important opportunities ir risk their very survival. Here are some key points to consider:

Thinking Ahead Succession Planning - The Key to future success

"Thinking Ahead"  succession planning enables organizations to takeover new responsibilities in a much faster way and with least disruption in the business activities.	An article highlights four best practices to ensure effective succession planning that can be implemented in any company - Analysis; Development; Selection and Transition. Having a structure in place that carefully engages in those best practices will set the new leaders firmly towards future success. Link to article >
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Thinking Ahead as a True Leader

The ability to 'think ahead' and plan a strategy, implies keeping in touch with employee opinions, technological advances and market trends that will help shape your vision - to be shared. Leaders, by definition, must have followers that aspire to the leader’s vision. Once you’ve  'thought ahead' into the future, you need to communicate your vision with conviction and confidence, as to inspire, energize and unite your team. A leader must be capable of shaping internal politics that will support performance improvement initiatives. During times of change, uncertainty and fear reign supreme. As a result, leaders confronting strategic and organizational change, have to manage communication effectively. As a leader, you have to portray a compelling vision for the future, while implementing change.  Processes that build a shared vision of the future, create positive coalitions, and allow open expression of competing views will prepare people for the change. Motivating people to peak performance is a must of  leadership. But how can you unleash the full individual emotional commitment and collective potential of your people so that they achieve higher levels of performance? Generating emotional energy and commitment takes time and effort, as to ensure that the right balance between achieving the task, building the team and  sustaining morale.

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Integrative Leadership: A collaborative model that delivers results

"In the twenty-first century a new vision of leadership is needed more than ever. Leaders must integrate knowledge and talent from individuals in the private, not-for-profit, and government sectors to advance the common good."   Marilyn Carlson Nelson, Chairman Carlson School of Management Integrative Leadership  = leadership that promotes innovative, responsible, and effective solutions to cross-sector challenges locally, nationally, and globally.