Growth strategy determines the direction20.01.2023
Generating growth requires succeeding in both the continuous improvement of current and the creation of new business. In addition, these have to be accomplished simultaneously.
As the pace of change accelerates, the customary operational models may change in an instant, sector boundaries may disappear, and digitalization can solve customer needs in completely new ways. Because of this, companies can no longer solely rely on their current business even if they are still growing. Companies must actively search for new growth for their operations: they have to think about how they can respond to changing market needs and conditions more quickly. A solid growth strategy provides the organization with a meaningful direction for innovative growth and a clear foundation for the development of current business operations. Succeeding in truly innovative growth and renewal enables significant results.
Tools for innovative growth
In addition to boldness, accomplishing innovative growth also requires the ability to do many things differently than before. Emphasis is put on predicting the future, and the ability to construct alternative visions of the future supports success. According to a study on the effect of future awareness and future foresight in European companies on profitability and growth, companies that consider future opportunities systematically outperform their peers by 200% on growth and 33% on profitability. Traditional strategy work bound to an annual strategy clock model will gradually transform into continuous strategizing where the determination of direction and means will be more closely connected with realization, which enables an improved strategic agility.
At its best, innovative growth is about the multiplication of business results.
As for innovative growth, companies will be faced with a myriad of options, and hence it is increasingly important to be able to systematically determine, evaluate, and prioritize new growth opportunities and to ensure a balanced portfolio of opportunities for growth. When choosing a direction, it is important to ensure its purpose and guiding principle. According to the Kasvun esteet ja edistäjät (Obstacles to and incentives for growth) survey that we conducted, companies that have achieved significant growth are more often guided by a meaningful direction. It is difficult to engage an organization in the growth process solely for the sake of growth, and, without a greater purpose for doing something, the results will often fall short of the objectives.
The growth opportunities selected as new starts are advanced via experiments and pilot projects. It is increasingly common that these are constructed in collaboration with selected clients and, in order to achieve a more extensive change in the market, in collaboration with other operators and even competitors. Particularly in industries undergoing significant changes, companies work together to form integrated processes and new ecosystems in order to solve market needs. These companies want to be pioneers, the designers of future markets.
In strategy implementation, the importance of establishing a meaningful direction and objectives is emphasized, as is the importance of laying out common principles and verifying progress instead of closely controlling all activities. Self-managing teams must be provided with the opportunity to find the best solutions by removing obstacles and roadblocks to progress.
Mastery of two fields
The development of current business operations should not be forgotten in the euphoria of innovative growth. From a strategic point of view, the purpose of the company’s established business operations is to ensure a profitable foundation for as long a period as possible. In the continuous development of current business operations, customer value is increased by developing customer experience and streamlining operational models.
When the organization has effective tools and operational models in use, the continuous improvement of operations becomes more effective and the new customer and market demand-oriented growth opportunities can be promoted in an agile way. In addition, in our experience, success achieved together lasts longer and generates a corporate culture of achieving goals.