Growth Strategy: An Imperative For CEO

Today's CEOs are focused towards attaining perennial growth than ever before due to competitive nature of business. Companies like Facebook, Google and Amazon symbolizes the modern growth story through innovative disruption. A true strategic planning focuses on incisive growth strategies. It can be on a product level, division or company overall. Some of the key questions to be asked are: Is the industry growing, how the company is growing relative to market, are the prices in line with the competitors .Other areas of focus can be analyzing what the competitors done in marketing and the product development. There should be an appropriate level of introspection as to which segments have the maximum potential that can be tapped to grow. From Financial point we need to know whether we have the required funding to grow and what are sources of funding both debt and equity component.

In order to execute the strategy CEOs need to focus on market dynamics and important aspects. Increasing sales is one of the important ways to grow the company. One should enhance the distribution channel and product line. The later part should be done in such a way that it doesn't cannibalize the existing product line. Major investment should be made on the sales and marketing which can offer great returns in the form of increased revenue and enhanced brand equity. Emphasis should also be on to diversify products and services.

One of the Indian PSUs, PNB housing deserves attention whose CEO planned and executed the turnaround .This company attained over 115 % CAGR over the last four years. The company value increased from 500cr to 6000cr during the period. This has been attributed to being fully customer centric focusing on untapped segments, disruption through online media, focus on human capital management ,low level of NPA's, high return on capital employed, high efficiency and productivity ratio.

The key method to grow the company is to get into alliance or acquire another company .But it has to be discerning in terms of objectives, costs, due diligence and exit strategy. The inorganic growth tends to change the capital structure of the company.

Some of the crucibles for change encompassing growth currently and in coming years would be - synthesizing data , trend analysis, Strengthening brand equity, Expanding Geographically , Focus on operational excellence , Ensuring financial growth , Reducing cost structures , Greater speed to market , Fostering innovation , Geographic expansion , Stronger client focus and human capital management.

In the last seven to eight years post 2008 morose economic crisis the thought process towards alliances has changed drastically. Now they believe in delivering smarter solutions. During the process they have to also partner with the third party which is extremely critical for success. There needs to be focus on synergy when alliance is better than an external built. The other advantage is that alliance can help to reduce the any chances of acquisition as two organization figure out how to work out together.

Alliance holds an edge over organic built but it's also true that they are not a replacement for an organizations capability. Demerger of Daimler-Crysler and successful Alliance of Nissan Renault are two extreme case of strategic alliance.

In today's precarious world the modern leaders have to consider lot of external factors like disruptive technologies, cloud and big data mobile globalization. In order to attain market leadership they have to come up with highly differentiated value proposition .The entire ecosystem needs to be managed with right set of underlying assumptions and customers in mind.

One of the factors that inhibit growth is lack of innovation. There are three barriers to innovation which needs to be dealt. The first is the rapid change in the customer dynamics. The second factor being the precarious nature of ROI involving technologies .The third is the budget constraints.

Another important factor relating to growth is well calibrated risk taking ability .This should be supported by the senior management and employees should get right kind of environment where ideas with potential are nurtured. Transformations should directly correlate with the consumer demands. Today customer royalty is the top priority in CEO's mind .They worry about new entrants who can take away their market share. The focus should be to be constantly being connected to the customers.

Another source of competitive advantage can be the regulators .There is a relation between intensity of the regulatory milieu and growth. The pressure on CEO's to deliver results is paramount .They must find ways to accelerate implementation, stay competitive and make the strategy planning process more feasible and competitive. Some of other factors affecting the growth process are corporate taxation, environmental regulation, corporate financial reporting, trade, privacy and labor regulation .Today's leaders should be adaptable to the changing business environment and the only way to do is to transform their business model to stay relevant.

Some of the concerns raised by the CEOs in attaining growth are: gap between current and new technologies, competitor's ability to take business away from organization, new entrants disrupting business model and how much relevant is the company's product and service in the future.

It is more imperative than ever to focus on the development and then execution of strategies to attain perennial growth. The concepts like reiterative developmental cycles, design thinking and viable offers can accelerate the process. There should be a constant effort to merge innovative concepts into traditional environment .Customers should be brought into development cycle as early as possible, embrace risk taking which can certainly accelerate strategy to execution cycle. Hence Strategy, operation model, Business Model and execution play an important role in the growth imperative.