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Change that Matters.

Results that
Count.™ | Organization | Execution
Strategy

Business Growth
 Building a Successful Growth Strategy & Track Record

CONTACT:
http://www.metamg.com
evan@metamg.com
845-621-3187 ofc
Successful Growth Strategy is Built on a Firm’s Value Chain –
Discovering Where Organic and Integrative Initiatives Can Add Value

0 mos. 12–36 mos


TIME
Organic Value Chain Growth
Impacts

Customers Rev. +_%


Technology Product Marketing &
(Segments, Manufacturing Service __ __%
Development Design Distribution Earn. +_%
Groups)
ROA

M & A Value Chain


_ _%
Formulation Transaction Monitoring & Evaluation Revenue
Rev. +_%
of Strategic Growth
Objectives Transition Implementation
Business Earn. +_%
Improvement

Set the Stage: Build Growth Culture: 4+2, 7S, others


Structure _ _%
4+2 Earnings
Strategy Systems
Primary: Secondary:
•Strategy •Talent
Implications of Growth
•Execution •Innovation
Superordinate
Goals
Organizational
Capability
+
•Culture •Leadership Skills Style
•Structure •Mergers and partnerships
Staff
Growth Strategy: Recent Research by Chris Zook Yields Two
Master Conclusions for Companies That Want to Grow…

1. Most sustained, profitable growth comes when a


company pushes out the boundaries of its core
business into an adjacent space

2. Companies profitably outgrow their rivals by


developing a formula for expanding those boundaries
in predictable, repeatable ways.

• Companies that have hit upon a repeatable formula show


success rates as high as 50%; some drive their rates up to 80% or
higher
• Repeatability allows the company to systematize the growth and,
by doing so, take advantage of learning-curve effects

Chris Zook, James Allen, “Growth Outside the Core,” Harvard Business Review, December 2003.
Repeatable Formulas Matter

The Majority of Standout Growth Companies Have One or Two Powerful,


Repeatable Formulas That Generate Successive Waves of New Growth
• Never put the core business at risk
• Never make a move unless you have a good shot at being one of the top three
players in a new space.
• Pursue only one move at a time
• The most important screen for new adjacencies is to limit the number of new
variables managed to a small number: one
These formulas are applied by leaders who approach growth strategy with
a strong sense of discipline and restraint

Typically,
Typically, growth-standout
growth-standout companies
companies grew
grew three
three times
times
faster than did the average company in their respective
faster than did the average company in their respective
industries,
industries, returning
returning 22%
22% annually
annually to
to shareholders.
shareholders.

Chris Zook, James Allen, “Growth Outside the Core,” Harvard Business Review, December 2003.
Growth Into An Adjacent Market Space Can Take Place in
One of Six Ways

Type Example
Expand Along The Value Chain De Beers extended its diamond business from
A difficult adjacency move wholesaling into retailing
Grow New Products and Services IBM moved into global services, which now constitutes
50% of the company’s revenue and pretax profits

Use New Distribution Channels EAS made minor changes in formulation, packaging,
and celebrity sponsorship of its Myoplex sports bar and
moved from a niche position in specialty nutrition
stores to become the leader in its category, selling to
Wal-Mart
Enter New Geographies Vodafone expanded from the UK to Europe, the United
States, Germany, and Japan
Address New Customer Segments Charles Schwab expanded its advisory services for
… perhaps by modifying a proven discount brokerage customers to target high-net-worth
product individuals
or technology
Move Into the “White Space” With American Airlines created the Sabre reservation
a New Business Built Around a system, a spin-off
Strong Capability (the “Blue Ocean” now worth more than the airline itself. Sabre, in turn,
Strategy) went on
to create a new business adjacency of its own in the
online travel
agent Travelocity
Michael Treacy, “Double-Digit Growth: How Great Companies Achieve It — No Matter What,” Portfolio, August 2003.
In What Dimension/ Direction Does Your Growth Strategy Extend?

Growth Driver Example


Similar offer extended to new Coca-Cola
Geography regions • US
• Europe
• Other developed countries
• New entry in emerging markets

Similar offer reaching Disney


Channel customers via new medium • Movies • Theme parks
• Television • Studio/Tour
• Videos attractions
• Cable subscription • Product licensing
• Hotels • Retail

Offering tailored to meet (new) Club Med


Customer customer segment needs • Single party-oriented vacationers
• Family vacations

More revenues per existing Dole


Product customers/channels via new • Bananas and pineapples
products • Fresh fruit and vegetables
• Packaged goods: desserts, juices
• Fresh prepared (pre-cut salad)
The Strategic Change Process: Follows a Set of Steps

Desired Future State


The Need for Change:
Complications

REINFORCEMENT

IMPLEMENTATION

ORGANIZATIONAL STRUCTURE

BUSINESS PROCESSES

STRATEGY & GOALS

VISION & VALUES

Current State
Where are we? How do we know? What’s our fact base?
Source:
What Are Your Business Growth Objectives?

How will your business achieve sustainable growth in ROA, revenue and profit, without
putting results in the short- to medium- time-frame at risk?
• Build core business
• Avoid contracting in existing shrinking market
• Fill/ use existing capacity
• Diversify into adjacent business offerings
• Enter new markets

Metamorphosis Management Group helps clients achieve growth objectives through a


structured process of development:
• Define clear thinking – shared business logic, terms definition and operating-model
“languages”
• Surface data – just the right amount – to support effective analysis and prioritization of
opportunities
• Drive decision-making processes through facilitated organizational-management and
workforce engagement
• Generate prioritized set of options
– Organic and internal-growth, and
– Acquisition/ partner development
• Enable effective organizational implementation, execution, and change
Building An Effective Growth Strategy Means Pursuing a “Parallel
Path” of Activities for Your Executive Leadership & Working Teams…

Phase 1: Initial Assessment/ Strategy Hypotheses


• Top team work, strategy outline, current state assessment, leader development
• Align the organization/ key teams through facilitated meetings and the use of common
language, tools and frameworks
• Agree conceptually about
– The likely business scenarios with which we’re working
– The areas that present the greatest growth opportunities, and
– The functions within the business most in need of investment

Phase 2: Additional Internal and External Analysis


• Evaluate (and either confirm or iterate) initial assessment/ strategy ideas using both
internal and external sources of data. Ideas to be evaluated include:
– Markets: Sizing, segmentation and competitive attractiveness
– Products: Size of the opportunity, investment required, risk assessment
– Internal investments in capability building in functional areas: determine competitive necessity and
perform a make versus buy assessment
– SWOT analyses of your organization relative to key competitors in each product area
– “Fit” between your organization’s
described strengths and desirable opportunities
– Team engagement re: findings …On
…On aa Rapid
Rapid Cycle
Cycle
Building An Effective Growth Strategy Means Pursuing a “Parallel
Path” … On a Rapid Cycle (continued)

Phase 3: Summarize Information, Identify and Prioritize Opportunities, and Develop


Strategic Plan
• Establish option evaluation criteria for both internal investment and targeted acquisitions
• Prioritize opportunities and make trade-offs:
(You can make the organization do anything management wants--but you do need to make wise
investment choices from among universe of desirable possibilities)
– Use facilitated organizational alignment meetings, data/ analyses to support
• Identify next steps for all groups of
opportunities & key work teams
• Refine & update strategy outline
based on learning Approach
Approach Summary:
Summary: In
In Parallel…
Parallel…
Phase 4: Execute Plan
•• Define
DefineaaCommon
CommonStrategy/
Strategy/Know
Know
• Implement initial internal growth initiatives
What’s
What’sImportant
Importantto
toTest
Test
• Capture learning/
•• Get
Getononthe
theSame
Same Page/
Page/
evaluate org capability development
Work
Work Together
Together
• Acquire initial acquisition targets,
complete deals and integrate •• Collect
CollectData
Data
• Achieve growth objectives •• Test
TestAlternatives
Alternatives
• Do it again – iterate plan •• Make
Make Decisions
Decisions
•• Iteratively
Iterativelyexecute
executethe
thePlan
Plan
Build a Transformation Map to Outline and Manage The Growth
Initiatives - For Each Key Business

Engage Strategic
2010

Leadershi Objectives
p Validation
Build case for change/ of Assumptions
growth; Set Process to capture
Leadership, roles, market data in the
development of Create market-data &
2008

responsibilities; sales projection analyses


Mobilize objectives and
financial targets to validate strategic
objectives; Gap Analysis
Run Strategic
Experiments to test What initiatives can be
assumptions in markets undertaken to eliminate the gap
between sales projections and
strategic objectives
Early Wins

Operating
Plan
Establish sales plan by
Ambition Business
key customer or
Statements Benefits/Scorecard
 Future Metrics segment
Performance  $ Benefits
 End-State  Non-Quantified
Descriptions Benefits Performance
 Key Goals  Intangible Benefits Management
Metrics and reporting to support field
efforts and provide visibility of
As-Is progress to management
State
We Help Clients Create Successful Growth Through Design,
Organization & Implementation Activities Operating “in Parallel”

Growth Program Development Process


Phase
Phase 1: 1: Phase 2 Begins
Formulation Monitoring & Evaluation
Decisions,
Stage of
of Strategic
Strategic Events Growth/
Objectives,
Objectives,
Transition Implementation
Due to Execution Improvement
Due Diligence
Diligence

Milestones ?Phase 3 Begins


Intervention(s) Definition “First Projects”/ Intervention/ Close
identified complete program Event + 100 Days
architecture Execution
complete
Value Driver Analysis Successful Major Growth
SWOT Efforts Put an Emphasis on
Change Design Planning, Value Capture,
Workstreams (Other Diagnoses/ Tools As Needed)
Communication, Culture and
Management/ Stakeholder Approvals Employee Development
Organizational Assessment and Planning

Communication Plan Development and Execution


Transition and
Implementation Change Planning & Implementation
Workstreams
Functional Area Planning & Implementation

Overall Growth Program Project Management


Foundational
Integration Team Formation
Process Knowledge Capture & Capability Building
Workstreams
Delivering Results Requires Discipline
START 12–24 mos. 36 mos.
TIME FRAME
3–6 mos.

Refine Assets, Opportunities,


Implement Growth Strategy
Strategies, Scenarios

Understand Capabilities, Markets, Drive Growth in ROA, Revenue, Profitability


and Opportunities

Focused
Growth Initiatives Meet/ Exceed
Growth Plan
Establish Introduced Mid-Term Plan
Implemented
Frameworks and Internal External
Common Assessment Assessment
Language • Options • Initial • ROA
identified acquisition(s) • NOI
Some Models - • Organizational • SWOT • Trade-offs completed
Portfolio Analyses: assessment • Revenue
• External position made • Initial Organic
• Value disciplines • SWOT, vs. competitors; growth initiatives
• 4+2 Capabilities • Value completed
• 7S Proposition • Internal
• Value Chain capabilities (like
delivery time)
• Growth tools improved

This
Thisapproach
approachhas
hasdelivered
deliveredresults
resultsat
atglobal
globalcompanies
companiessuch
suchasas
••Fuji
Fuji • Sumitomo Heavy Industries • Cadbury–Schweppes • Intermagnetics/Philips
• Sumitomo Heavy Industries • Cadbury–Schweppes • Intermagnetics/ PhilipsMedical
Medical
High-level Growth Strategy Work Plan (Sample)
Timeline Varies Based on Client, Urgency, Resources…

Feb Mar Apr May-Jun July-Sept


Develop Detailed
Fundamentals External Market
Project Set Up Implementation
Overview Research
Plan
• Work planning • Org capabilities & • Understand • Identify growth • State strategy
market customers & markets options
• Background data • Outline
• Competitive
analysis • Preliminary organizational
intelligence • Organic
interviews impact
• Clarify charter • Industry benchmarks
• Early hypothesis • Identify potential Opportunities • M&A • P&L, O.P. plan
• Kick Off [date] generation growth areas Generation direction
• Refine scope • Recommend • Costs, ROI
and
Internal Data strategic
• Update meeting Analysis Prioritization direction [date] • Rollout/Transition
[date] plan
Refine • Detailed review of • Sensitivity
Scope performance and analysis
operations.
• Customer, channel
profitability
Understand
How
Business Senior Approval Deliver
Model Understand
on Strategic Targeted
Works Position in Markets,
Direction Growth Plan
TODAY Opportunities and
Future Potential

Preliminary Business Assessment

Three Months, estimated… Schedule TBD


How Does Your Business Plan to Achieve Its Growth Objectives?

Metamorphosis Management Group helps clients to achieve objectives through a


structured process of engagement:
• Defining clear thinking – shared business logic, terms definition and operating-model “languages”
• Surfacing data – just the right amount – to support effective analysis and prioritization of the
opportunities in your “risk portfolio”
• Driving decision-making processes through facilitated organizational-management and
workforce engagement
• Generating prioritized set of options
• Enabling effective organizational implementation, execution, and change

Strategy is the
evolution of a
central idea Metamorphosis Management Group is a team of results-oriented leaders and program
over managers with broad functional experience enabling change in a wide range of organizations.
continually
changing We are former managers, operators and consultants—who have worked as senior leaders in
circumstances. general management, business development, sales & marketing, organizational effectiveness,
-- Helmuth von operations and consulting.
Moltke, We help companies deliver measurable results by fostering successful organizational and
19th c. Prussian
general individual change.
We partner with clients to get top- and bottom-line results and reduce operating risk, by helping
to design, build and manage strategy, organization and systems programs—to get
“Results That Count”.

Develop
Developand
andimplement
implementaaGrowth
Growthand
andInnovation
InnovationApproach
Approachthat
thatfits
fitsyour
yourorganization
organization
Contact Us

Evan Smith
evan@metamg.com

http://www.metamg.com
info@metamg.com
845-621-3187 ofc