MarketBusting: strategies for exceptional business growth.
If company leaders were granted a single wish, it would surely be for a reliable way to create new growth businesses. Business practitioners'overwhelming interest in this subject prompted the authors to conduct a three-year study of organizational growth--specifically, to find out which growth strategies were most successful. They discovered, somewhat to their surprise, that even companies in mature industries found rich new sources of growth when they reconfigured their unit of business (what they bill customers for) or their key metrics (how they measure success). In this article, the authors outline these and other moves companies can make to redefine their profit drivers and realize low-risk growth. They offer plenty of real-world examples. For instance: CHANGING YOUR UNIT OF BUSINESS: Once a conventional printing house, Madden Communications not only prints promotional materials for customers but also manages the distribution and installation of those materials on-site. Its revenues grew from dollars 1o million in 1990 to dollars 133 million in 2004, in an industry that many had come to regard as hopelessly mature. IMPROVING YOUR KEY METRICS-PARTICULARLY PRODUCTIVITY: Lamons Gasket, with dollars 80 million in revenues, built a Web site that radically improved its customers' ability to find, order, and pay for goods. The firm's market share rose along with its customer retention rate. The authors also suggest ways to identify your unit of business and associated key metrics and recognize the obstacles to changing them; review the key customer segments you serve; assess the need for new capabilities and the potential for internal resistance to change; and communicate to internal and external constituencies the changes you wish to make in your unit of business or key metrics.
McGrath
Rita Gunther
RG
Columbia University's Graduate School of Business, New York, New York, USA. rdm20@columbia.edu
MacMillan
Ian C
IC
D003132:Commerce / Q000191:economics*; D007857:Leadership; D040541:Marketing / Q000379:methods*; D014481:United States