When Michael Treacy, consultant, former MIT professor, and author of "Double Digit Growth," studied successful growth-oriented companies, he found that less than 8 percent of companies in the S&P 500 achieved double digit growth for 5 consecutive years. After studying both these companies and many more, Treacy realized that achieving consistent, successful growth wasn't necessarily about strategy, as he originally thought. It was more about management talent. And often about how management thinks - too many companies, said Treacy, see only barriers to growth: 1. market opportunity - "demand just isn't there", 2. competitor resistance - "we'd start World War 3", 3. operational capacity - "we couldn't add that much capacity", and 4. financial capacity - "we can't afford the expense." Unfortunately, said Treacy, most companies are quite comfortable with NOT getting double digit growth.
Successfully and consistently growing companies share four common characteristics, according to Treacy:
1. Commitment to a superior customer value proposition - it's "why customers do business with you"
2. A focus on five, and only five sources of revenue growth: base retention, share gain, marketing positioning, adjacent markets, new lines of business
3. Managing a portfolio of growth opportunities
4. Depth of and commitment to management discipline to grow.
Key question: do you have the best and brightest deployed on the right growth ideas from your portfolio? The best management team will beat the best strategy every time. Unfortunately, a B management team can't always execute an A strategy - the strategy will fail and you'll be left with the B management team.
We'll be posting more from Treacy's keynote speech, along with reports from educational sessions, on Tuesday. In addition, look for a special report on the conference in the next edition of FSIVoice, the newsletter of FSI, at the end of February.
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