Want Growth- Look in the Mirror

Not happy with your rate of growth? You could be the problem. That’s one conclusion of Mark Brewster, the leader of organic growth practice at Marakon Associates, a U.S. management consulting firm.

Brewster’s insightful views on growth were recently published in the business section of the New York Times. Organic growth is growth that is achieved internally, not by acquisition, and according to Brewster, it is something few companies are very good at these days. The factors acting as a drag on a given company’s growth potential include lack of ideas, too many ideas, defective organizational structure and uninspiring, uncreative management, for starters.

Not surprising. But what makes Brewster’s ideas interesting is that they aren’t merely variations on blame theory. Market conditions themselves can create circumstances that make it difficult to throw off the growth doldrums. Brewster observes:

“If you look at the failure rates of innovation at consumer oriented companies, you see how hard it is to come up with genuinely new ideas. For a lot of companies it’s hard to control because they depend on intermediaries like retailers (or end-users: author), who have become increasingly fickle and demanding of many of their suppliers. It’s also hard because competitors are fiercely eroding your advantage wherever they see it. The rate of copying innovation is rapidly increasing.”

Brewster reports that two companies doing a good job of generating ideas and growth are Proctor & Gamble and 3M. Proctor & Gamble has managed to transform itself from a company trying to grow on too many fronts to one focused on its core brand products-household names such as Tide, Pampers, Bounty and Clairol. The critical breakthroughs for P&G has been the way it invests for growth and the creation of a company culture focused on product and marketing innovation.

3M, says Brewster, had the opposite problem: too many innovations. 3M CEO Jim McNerney has had to dial down this organization’s robust creativity and get it to focus on bringing a few big hits to market.

But there’s a more mysterious question lingering in this analysis, namely how are ideas generated, and how does a manager foster a culture of innovation?

By tapping into the brains of their customers, says Stefano Maranzo, head of design at consumer electronics manufacturer Philips. A no-brainer, right? Not exactly. In an article published in The Economist Moranzo says that companies need to get away from the idea that people simply want products, and look instead at what they value. In his view, consumers want to be all-knowing, all-seeing and all-powerful, and receive maximum comfort and freedom with minimum effort.

That’s a pretty high bar. At Philips they’re walking the talk. The company uses specific values that its consumer research has uncovered to promote product development.

Companies that have been in a defensive cost-cutting mode for any period of time face a more difficult challenge trying to generate internal, organic growth. These companies have to reconnect with their customers and understand that there is sometimes a difference between what a customer says he wants and what he will actually buy.

In Brewster’s view, there’s no such thing as mature markets, only mature, complacent management teams. As an example, he cites the so-called mature computer hardware industry, where Hewlett-Packard has struggled, but a company like Dell is scoring healthy profits.

So take a look in the mirror. Perhaps you’re getting too “mature”.