Growth

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Growth

Companies that want to grow in a way that fits their capabilities system and way to play can pursue one of four avenues.

roll over the dial to activate animationt Download the Flash plug-in to see the Flash-based content on this site.		1. They can grow the core of their business, getting more from their existing customers within the "headroom" of their current products and services. 2. They can look for capability adjacencies, typically products and services that they haven't offered before, that allow them to apply their existing way to play and capabilities system in new market domains, in ways that complement their existing offerings. 3. They can expand their geographic footprint, extending their existing capabilities system and offerings to new places and new customers. 4. Most exceptionally, they can build new capabilities that expand (or replace) their existing way to play, potentially giving themselves a completely new platform for growth. This is by far the riskiest growth approach.

We present the four types of growth as a bull's-eye. The approach that tends to generate the most value is the one at the center. Options get more expensive and riskier as you move toward the periphery.

Growth Through a Capabilities Lens

Cesare Mainardi, Ken Favaro and Tom Stewart in conversation: Why is it so difficult to achieve sustainable growth? What is the most promising growth avenue that companies should pursue? And how can they capture the headroom of their business?

watch the video >

Key Publications on Capabilities-Driven Strategy

Prioritizing Your Growth Options
by Paul Leinwand and Cesare Mainardi
“How are we going to grow?" Executives are asking that question again, two years after the financial crisis sent global economies tumbling and put many companies in retrenchment mode. The recovery still has a one-step-forward, one-step-back feel to it, especially with Europe facing new challenges. But for many companies, profits are strong and at least some are starting to go on the offensive.read more on chiefexecutive.net >

How Companies Can Use "Coherence" to Drive Growth
by Paul Leinwand and Cesare Mainardi
When companies ask themselves how they are going to grow—especially in a sputtering economy like this—the answer they come up with usually has to do with something external: an acquisition or expansion into an emerging market. But companies really should be looking inward to answer this question. In particular, they should be looking at their unique capabilities—usually the best source of growth.read more on chiefexecutive.net >

A Conversation with the Authors of The Essential Advantage: Frequently Asked Questions on Capabilities-Driven Strategy
with Paul Leinwand and Cesare Mainardi
In this interview, the authors of The Essential Advantage point out that in this unpredictable economy, traditional approaches to strategy are a luxury most companies cannot afford. Instead they need to follow a Capabilities-Driven Strategy, starting by conducting a clear-eyed assessment of what they as a firm already do exceptionally well, and then doubling down on those differentiating capabilities.download (211kb, PDF) >