I was just reading Double Digit Growth by Michael Treacy.
Yes, during work hours. Call it my version of eating bon-bons. I needed a break. And his book is one of many in my recent pile of acquisitions. Recent being the last 3 months. And I’m so far behind, I’ve actually NOT bought a book for several weeks now. I feel some hives coming on.
Nonetheless, a good if not ridiculously easy read.
Hypothesis of author was that the difference between steady fast-growth businesses and also-rans would be found in their strategy. Growth companies must be making different decisions, placing different bets, and building better strategies than everyone else. Research showed something different. The major difference was the approach. The ones who grew in a sophisticated way built portfolios of growth initiatives to spread risk and improve the predictability of results. Further, they had good management systems for planning, controlling and measuring growth that were different. So the approach was both organized in what they chose to do to drive growth, and then again in the way measure success. Fundamentally, they were organized vs. haphazard.
There were only 130 businesses studied which seems ridiculously small so I question a great deal of his answers. Some of which, in the end, seemed a bit trite. Example of such:
“Commit to superior value. Nothing stops growth faster than an inferior value proposition. Superior value makes everything easier.” Oooh, genius.
But the fact I actually read it all the way through is a sign that it’s a decent book.
One thing I thought was a good checklist on what organizations do as they stop growing, called…
5 paths to perdition:
1) Company has overexploited its franchise by ignoring customer value.
2) Placed bets on a market in which growth didn’t happen.
3) Lost a proprietary advantage (People. Patents, etc).
4) Missed a significant value shift in the market place. Could be a move from low-cost supplies to total solution suppliers. I think the Web 2.0 business models I’ve been writing about that are fundamentally about a value shift which is really easy to miss.
5) Caught napping by new competitor with next-generation value.
I can imagine the list is only good in hindsight. You’re never going to make a bad bet or purposely miss a value shift. But a good checklist nonetheless to discuss IF you are doing any of these thinks.