13. October 2022
Seven Principles for Achieving Tranformational Growth
In a transformational situation, growth is key. I like the McKinsey article ‘Seven principles for achieving transformational growth’. It lays out 7 insights:
- Look past the myths
It’s key to break free of some limiting myths. For example, there is the myth that you should not invest in growth during a crisis like Covid. However, it has been proven that companies that have healthy liquidity and balance sheets and dare to invest in growth come out ahead in a crisis.
- Cleansheet a bold growth goal
Don’t base growth targets on last year’s numbers. Instead, start from scratch with a zero-based strategy. It’s based on breaking the business down into its component parts: customer journeys, brands, product lines, commercial activities, and then setting a peak performance goal.
- Drive big impact from multiple moves
This is not a single big bang solution, but a comprehensive approach, ranging from boosting marketing effectiveness to motivating sales teams to testing and scaling pricing innovations.
This often requires looking outside the organization for best practices and then rigorously applying them.
- Deliver a constant flow of growth
Sustainable growth comes from creating and scaling up a series of initiatives. This requires a balance between quick wins (within 3 months), mid-term operational improvements (3 to 9 months), and long-term strategic benefits (up to 3 years). All initiatives must be constantly reviewed and reprioritized as the transformation progresses.
- Execute with rigor
Companies that are successful at large-scale performance improvements apply the same rigor to growth transformations as they do to operational or cost efficiency improvement programs. Ideas and goals are translated into plans with detailed forecasts, KPIs and milestones. Company-wide support is fostered via compelling communications to employees. Middle management and frontline staff are fully involved.
- Turn measurement into a competitive advantage
No growth transformation goes as planned. Changing circumstances throw plans off track. That’s why it’s important to measure progress and then act decisively to duplicate successes, overcome setbacks and capitalize on new opportunities. Accurate measurement can be achieved through new digital metrics and advanced analytics combined with customer experience improvements.
- Make capability building a priority, not an afterthought
Success in a digital world requires a wide range of expertise and analytical skills. The best way to achieve this is through personalized development plans. Courses and training are useful, but the best way to learn is to sit next to an expert, observing, and practicing a new skill. Daily coaching and role modeling are helpful.
What other levers would you add to these seven?