Growth is every CEO's challenge - Deloitte Consulting Presentation
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Transcript of Growth is every CEO's challenge - Deloitte Consulting Presentation
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Growth is every CEO’s challenge
Lessons in growth
October 2013
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Growth in turbulent times!
Growth Lessons from the Trenches
What does the research say?
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Growth is critical for TSR
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Equity markets demand growth
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Spinning straw into gold is not easy!
Over the period 1987 – 2005, Deloitte
researched close on 5,000 companies in the
USA to establish patterns of growth and
critical success factors
Companies that attained critical mass (more
than $250M) have a greater chance of
surviving
Of the companies that survived, only 27%
experienced high growth that is two times
that of market CAGR. Among companies
analysed, only 6% achieved performance
enhancing growth over the long run i.e.,
growth that also improves the bottom line
and key performance metrics
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Growth stalls are common and
troublesome 87% of historic Fortune100 and Global 100
companies hit some type of growth stall*
between 1955 and 2006
More troubling are the long-term effects of
growth failure: 54% of companies that
experienced growth failures posted slow to
negative growth during the 10 years after the
growth stall occurred
* A “stall” is defined as the moment in time that represents a turning
point, or significant downturn, in corporate revenue growth
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Causes of growth stalls can be
managed In total, 87% of the factors that most often
contribute to growth failure are within
management’s control
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Building the right internal capabilities
to execute is critical to success
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Beating market growth expectations
and closing the “Growth Gap” is key
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Matching risk appetite with ambition
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Constructing a growth portfolio that
aligns with your risk tolerance
All three portfolios will provide the same projected annual revenue growth
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Deloitte Drawing Guides
7.40 cm
2.91 Inches
6.00 cm
2.36 Inches
8.00 cm
3.15 Inches
11.70 cm
4.61 inches
0.50 cm
0.2 inches
0.50 cm
0.2 inches
11.70 cm
4.61 inches
To view Deloitte drawing guides:
1. Right-click on slide and select ’Grid
and Guides...’
2. Check ’Display drawing guides on
screen’
3. Select ’OK’
Growth in turbulent times!
Growth Lessons from the Trenches
What does the research say?
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This factor drives 90% of success or
failure of any growth initiative
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ENSURE ACCESS TO A BANKER 6
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7 USE
TECHNOLOGY TO MAXIMISE
RESULTS
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REWARD THE RISK TAKERS 8
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IF YOU MUST FAIL, FAIL QUICKLY 9
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RESULTS CHANGE CULTURE,
COMMUNICATE 10
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GROWTH LESSONS FROM THE TRENCHES
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GROWTH LESSONS FROM THE TRENCHES
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Black swans are the norm, not the exception Everything is being commoditised Great customer service has become table steaks, not a differentiator
Change happens FAST
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There is unprecedented volatility
wherever you look
The connectivity revolution is changing
the world as we know it!
Technology is changing the very fabric
of our societies – FAST!
Change happens FAST
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People don’t trust banks and the government
anymore
To stay ahead, eat yourself before someone
else does!
Industries are converging – where is yours?
Growth requires a fresh perspective
Change happens FAST
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“Do you remember 2013?” Ethnic conflicts, AIDS and terrorism
Disillusionment with government
Human politicians…the end of heroes
Businesses more powerful than governments
End of ‘nationalism’ and an explosion of
new ‘borderless’ loyalties
This was the realisation of the age of the individual – “I want it all
and I want it now”!
Democracy and technology were the catalysts!
Change happens FAST
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71% of TSR comes from REVENUE growth
Many companies have to run twice as fast just to stand still!
Outperforming the market is difficult – you need to build special capability
Growth stalls are common – and troublesome!
Much of what creates growth stalls can be controlled by management
Portfolio, portfolio, portfolio!!!
….and what about growth?
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1. Metrics and targets drive success! Starting with a clearly articulated growth target is crucial for galvanising the organisation.
2. De-link Business of Today from the Business of Tomorrow! Recognise that the two are very different. One typically leads to incremental growth, the other to quantum growth.
3. Deploy the right dedicated resources! Rotating high fliers through a growth office is both transient and sure to be unsuccessful. Growth requires a combination of different skill sets.
Growth lessons from the trenches
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4. Seek widely for opportunities! You can’t simply extrapolate from the past. The most powerful successes are not predictable. Taking risks is safer than doing nothing!
5. Make the growth process repeatable and sustainable! Setting up a governance process to make investment trade offs in a considered approach helps an organisation to manage risks.
Growth lessons from the trenches
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6. Ensure access to the banker upfront Corporate antibodies focused on the business of today are sure to win the battle for investment capital. Spinning straw into gold takes time and investment – have your lines of credit agreed upfront!
7. Use technology to maximise results A digital skin with one internal clock that runs 24x7x52. Use the entire technical resource base at your disposal.
8. Reward the risk takers Innovation for growth requires a different approach to recognition and reward!
Growth lessons from the trenches
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9. If you must fail, fail quickly Time really does equal money. Avoid pet projects driven by politics and be in the business of killing ideas as soon as possible!
10. Results change culture – communicate! Culture is driven by leadership delivering results. Celebrate success, make heroes of staff who deliver results.
Growth lessons from the trenches
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Growth lessons from the trenches
11. Search for the hero inside yourself!
OOOOOPS…almost forgot
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The world is changing at break-neck speed
Change brings boundless opportunities to grow your business in the competitive jungle!
Will you grow?
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Remember, the future should be a matter of choice and not chance… …and growth is too! So…
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Thank you!
Michael Vincent Director | Deloitte Consulting (Pty) Ltd
2013 Innovating for growth
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“Everything you
want is just outside
your comfort zone.”
Robert Allen