I facilitate a lot of strategy sessions with clients and one thing that I observed is that in 99.9% of cases, strategic objectives are about growth. So, you would think that everyone is clear by now on all the different ways an organisation can unlock growth. Well, it’s not been my experience.
In this blogpost I want to highlight the key strategic questions and steps that will guide you towards creating a growth plan that makes growth objectives explicit, and more importantly clarifies where growth will come.
What’s the vision for a different future that underpins the overall strategy?
It’s hard to think about growth without a picture of the future you’re aiming to create. When this vision is not clear enough, I find it useful to spend a bit more time on the question above. Sometimes the unlock for executives comes from facilitated activities that invite them to imagine a future where their organisation doesn’t exist anymore or when they scan their business environment together to discuss the emerging trends that will shape that future.
What are the key strategic objectives?
Once that context is clear(er), the discussion can move on to clarifying the key strategic objectives. As mentioned in the introduction, in 99% of cases, those strategic objectives will be about growth. So, let’s make growth objectives explicit.
Is there a growth gap?
If you project historic growth performance into the future, will you meet your future growth objectives? If not, then you have a growth gap that should be made explicit and you need a clear growth plan to fill the gap.
Where is growth coming from?
In a recent article, my Vibrance colleagues Sahil Merchant, David Pountney and I introduced the Growth Map we use to stimulate the conversation on where growth could come from.
The Growth Map highlights all the different ways an organisation can generate growth and leaders should make their expectations for each growth bucket explicit as an outcome of the strategy discussion.
The below chart shows the example of a company that identified a 750M AUD growth gap at the 2030 horizon and their plan to fill it.
How will we create that much growth?
Most organisation have an established and effective way of delivering growth objectives, at least for some of the growth buckets.
In the organisation depicted earlier, organic growth objectives are typically described in the corporate strategy, distributed to the whole company as part of the objectives setting process and their realisation is managed by the existing performance management systems in place.
Like most large organisations, it also has a corporate strategy team that manages strategic partnerships, M&A, etc. as strategic projects under their responsibility.
But things were not as solid for the next two growth buckets: adjacent areas and new areas outside of the core business. Indeed, most organisations don’t have a clearly articulated innovation strategy. That means there is no clear answer to the question: what objectives is innovation helping the organisation achieve? And beyond a few isolated innovation vehicles, there is often no integrated innovation capability able to go all the way from an initial idea to a new business launched on the market.
This is where an assessment of an organisation’s current innovation capability is often required to identify strengths to leverage, as well as current weaknesses and blind spots. With that knowledge, you could then set up or improve the innovation capability that would enable your organisation to reach its growth objectives in adjacent and new areas.
Now you can bring all those elements together in a simple growth plan.
For the organisation I was mentioning earlier, this is the growth plan that they put together. It integrates all the different ways they plan to generate growth, makes explicit the growth target for each, and how those growth objectives would be delivered at a high-level.
Despite our collective obsession with growth in the business world, many organisations can suffer from growth blind spots. Sometimes operational excellence is seen as the only way to generate growth, ignoring opportunities in adjacent, or new territories outside of the core business. Sometimes an organisation has a strong preference for acquisitions to create new growth and might be oblivious to other opportunities within their reach. With our Growth Orienteering approach and the strategic questioning outlined in this article, executives can explore and discuss every possible avenue for growth, make explicit choices, set growth targets and eventually clarify the different strategic levers they will use to achieve them in the short, mid and long term.
About Fred
Executive advisor on strategy and innovation. Co-author of The Invincible Company, a guide to building resilience in organisations with corporate innovation and shortlisted for the Thinkers50 Strategy Award 2021.
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