0904 Plotting Your Course Along The Growth Excellence Matrix


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In this presentation we discuss how to design and implement a growth system and once that is complete we will talk about growth strategies for a recession by introducing and discussing a Frost & Sullivan proprietary tool called the Growth Excellence Matrix, which we sometimes refer to this as GEM.

The Growth Excellence Matrix is our strategic approach to measuring a company’s future growth potential as a function of their strategic excellence and implementation excellence relative to their competitors. In this session, Craig will examine techniques that help identify areas for improvement and opportunities for growth in developing strategies which are realistic and achievable based on both internal as well as external challenges to growth. He will also discuss in detail the key fundamentals driving the future success of leading organisations and provide insights for creating a culture that will foster and ultimately lead to thought leadership, growth and innovation.

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0904 Plotting Your Course Along The Growth Excellence Matrix

  1. 1. Chairman’s Series on Growth Investing in Your Company’s Growth Potential: Plotting Your Course Along the Growth Excellence Matrix Presented by Craig Baty Global VP, IT Practice, Sydney, Australia Frost & Sullivan 21 April 2009
  2. 2. Agenda 1. Overview: Where We Are in the Series 2. Why Measure the Future Growth Potential? 3. Introduction to the Growth Excellence Matrix (GEM) 4. Key Applications 5. Validating the Model 6. Competitive Benchmarking 7. Serious About Growth: Next Steps 2
  3. 3. Polling Responses from March APAC/J CSG W hic h o n e o f th e follo w ing to o ls is y ou r c o m p a n y us in g to d riv e g ro w th? Str a tegi c Plan ni ng 33 .3 % N ew Pr od u ct D ev e lo pm en t 6 6.6 % C om peti tive Posi tion in g a nd Bra n ding 33 .3 % Sal es Optim izati on 6 6.6 % D is trib uti on C h a nne l Optim izati on 6 6.6 % Is M & A a cu r re n t c o m p o ne n t o r fo cu s in y o ur gr ow th s tr a te g y ? Yes 100.0% No 0.0% D o y ou fee l tha t y ou h av e a s s op his tic a te d a n a p pr oa c h to M & A a s yo u w ou ld id e ally lik e to ha v e ? Yes 0.0% No 100.0% 3
  4. 4. The Growth Acceleration System 4
  5. 5. Introduction to Growth Excellence Matrix (GEM): Ford in Hybrid SUV market Growth Strategy Factors: Growth Excellence Matrix Ford is losing global market share year after year 10 Toyota and Honda have most potential to gain / grow market share in Hybrid market Toyota Ford is early adopter of technology trends, but suffers with high cost to manufacture Growth Strategy Excellence Dodge Hyundai Toyota first to market with affordable, mass production hybrid Ford Honda Ford does not try to compete with other auto- 5 makers by “best in class” practices, they focus on consumer perspective with investments in Nissan end-user data instead of market trends Implementation Excellence Factors: Chevrolet Ford has invested in costly, high-profile marketing campaigns that do not translate to consumer sales 0 0 5 10 Ford has high brand cache in APAC markets as luxury vehicles Implementation Excellence No unified growth strategy, they are trying several diverse strategies at once and hoping one will work 5
  6. 6. Growth Strategy Excellence Factors 1. Benchmarking Growth: Industry and Company 2. Culture of Growth, Innovation and Leadership 3. Vision Alignment between Leadership and Staff 4. CEO’s 360 Degree Perspective is Leveraged 5. All 10 Growth Processes are Leveraged 6. Growth Pipeline System 7. Growth Strategies are Evaluated through All Research Methodologies 8. Key Growth Careers (CEO’s Growth Team) are Leveraged 9. TEAM Research Leveraged to Generate Ideas 10. Leadership Focused on Growth ** Each factor is scored on a scale of 1-10 (10 is high) 6
  7. 7. Implementation Excellence Factors 1. Best Practices in Sales & Marketing 2. Best Practices in Research & Development 3. Best Practices in Key Support Departments 4. Best Practices in Leadership 5. Best Practices in Finance 6. Vision Implementation Alignment 7. Best Practices in Project & Business Planning 8. Training on Best Practices 9. Culture of Growth, Innovation and Leadership 10. Best Practices in Implementing the 10 Growth Processes ** Each factor is scored on a scale of 1-10 (10 is high) 7
  8. 8. The Growth Excellence Matrix: Growth Strategy vs. Growth Strategy Implementation Growth Excellence Matrix Current position based 10 Client on Strategy & Implementation Netflix Apple Hyundai Growth Strategy Excellence Starbucks VC Startup Dell GE 5 AT&T Mercedes Ford McKinsey United Airlines Home Depot Bank of America 0 0 5 10 Implementation Excellence 8
  9. 9. Growth Excellence Matrix: 4 Key Applications • Competitive Benchmarking Future Growth Potential • Merger & Acquisition • Growth Investing • Vision Alignment 9
  10. 10. Developing a Valid and Replicable Growth Measurement System • Provide support to highlight and enhance GEM as a powerful benchmarking tool. • Enhance the ability of GEM as a diagnostic tool and as a prescriptive tool. • To validate GEM as a predictive tool, providing evidence that it positively impacts company growth and performance. 10
  11. 11. The Dynamics of Growth Strategy Excellence, Implementation Excellence, and Growth The effectiveness of growth strategies on growth depends Implementation on the level of implementation Excellence excellence. Growth Strategy Growth Excellence 11
  12. 12. G lo ba lP er Index Score Sy sp nt ec he tiv si e s of of 0% 20% 40% 60% 80% 100% St Te ra ch te no gy lo gy Pe rs B pe es ct tP iv ra e ct ic es Pe rs pe R ct es iv In ea e te rc gr h at Su ed pp U or nd tT er Low Growth st EA an M G di ro ng w th of Sy In st du em st ry or G ro w Ave Growth th Pi pe lin Vi e si on ar y all the growth strategy excellence attributes Le ad er sh ip High Growth G ro w th W or ks ho p High growth companies generally have higher index scores across 12
  13. 13. Te am C on se Index Score ns us on B 0 0.2 0.4 0.6 0.8 1 es St tP ra ra te ct gy ic es fo r M ar ke B tin es tP g ra B ct es ic tP es fo ra ct r Sa ic le es s fo r M an ag em Low Growth en t Fo cu Se se ns d e Tr of ai U ni rg ng en on cy B es Ave Growth tP ra ct M ic an es ag em en all the implementation excellence attributes to fC ha ng G e High Growth ro w th En vi ro nm en t High growth companies generally have higher index scores across 13
  14. 14. The impact of growth strategies varies across levels of implementation excellence Strategies that significantly drive growth High Global Perspective of Strategy Best Practices Growth System or Perspective High Impact on Growth Growth Pipeline Average implementation Low implementation excellence implementation excellence companies: excellence companies: • grow with a global companies: • are affected perspective of • are more considerably by strategy vulnerable to strategies focusing • are impacted by intensity of on best practices new market and new competition strategies or those product strategic • have potential for pertaining to orientation operational Low growth via technology excellence turbulence Low Average High IMPLEMENTATION EXCELLENCE 14
  15. 15. High growth companies generally have higher index scores across all the performance metrics 100% 80% Index Score 60% 40% 20% 0% Growth vs. Industry Growth vs.Top Performance- Performance - Competitor Financial Quality Low Growth Average Growth High Growth 15
  16. 16. Sample Mapping on the GEM Matrix GEM Gliders High flyers Growth Strategy Excellence Cisco GE Security Honeywell Agfa Health Florida Corporation US Postal Public Utilities Service Standard Microsystems Strugglers Underachievers Implementation Excellence 16
  17. 17. Quadrant Differentiators GEM GEM GEM GEM Gliders High Flyers Strugglers Underachievers Strugglers are unable to Underachievers have the Gliders soar only if the High flyers soar at will, formulate and implement discipline to implement, wind allows, but lack the backed-up by a jet engine. any growth strategy. but lack strategy. engine to sustain flight. Growth Strategy Excellence Growth Strategy Excellence Growth Strategy Excellence Growth Strategy Excellence Implementation Excellence Implementation Excellence Implementation Excellence Implementation Excellence 17
  18. 18. Implications of GEM Focuses an organization GEM on the steps that lead to growth Represents a frontier • Sound framework capability for speedy, • Evidence-based quantitative-based • Diagnostic capability measurement • Prescriptive capability Compresses the awareness to action • Predictive capability cycle 18
  19. 19. Global Automation and Process Control Markets: Evaluation of Market Participants Based on GEM (2007), World The contract to upgrade three refineries of British Petroleum Revenue growth rate of Emerson for the year 2006 (BP) is a key win for Emerson in 2006 is 16.0% During the period of 2004 to 2006, the company introduced more than 500 major products, which is a huge increase over any preceding period for 10 Emerson Growth Strategy Excellence Emerson acquired Artesyn Technologies, Knurr Honeywell Emerson AG, Bristol Babcock to serve diversified market. Siemens ABB Schneider Invensys Rockwell 5 Yokogawa 0 0 5 10 Implementation Excellence Source: Emerson Process Mangement 19
  20. 20. Global Automation & Process Control Markets: Evaluation of Market Participants Based on GEM (2008), World Over the last 18 months, the company has been selected to install its PlantWeb® digital plant architecture with the Ovation® expert control system at 12 new U.S. coal-fired units Acquisition of Data Management Inc, Damcos Holding, The Automation Group 10 Emerson’s launch of SmartWireless – based Growth Strategy Excellence on wireless Hart protocol for plant wide area Honeywell Siemens Emerson application, with 99% data reliability. ABB Schneider Invensys Rockwell 5 Key wins as Major Automation Contractor in Yokogawa China & the Middle East drive the growth for Emerson Emerson and Cisco have combined their 0 expertise and technology to deliver a complete 0 5 10 open standard solution for wireless process and plant management applications Implementation Excellence 20
  21. 21. Global Automation and Process Control Markets: Evaluation of Market Participants Based on GEM (2008), World ell wa er ys n ll ns yw eid we so ga ns me er ne hn ko ck ve B Em Sie Growth Strategy Excellence AB Ho Ro Yo Sc In 1.Growth Compared to Competition and Industry Average 2.Visionary Integration of Technology,Markets, Economics 3. Strategic Partnering Optimization 4. Industry Breadth Perspective 5. Best Practice Perspective 6.Team Research Methodology & Evaluation 7. CEO’s Growth Team Utilization with GrowthWorkshops 8. Comprehensive Growth Pipeline System Implementation Strategy Excellence 1.Team Consensus on Growth Strategy 2. Best Practices in Marketing 3. Best Practices in Sales & Sales Management 4. Best Practices in Leadership Change 5. Best Practices in Strategic Partnering 6.Technology Integration & Adoption Skills 7.Growth Training: Collaboration & Best Practices 8.The GIL Culture: Growth, Innovation and Leadership 9. Best Practices in R&D and Product Management 10.Global Teamwork on Growth Strategy Plan 1-5 6-7 8-10 21
  22. 22. Global Automation & Process Control Markets: Comparative Evaluation of Market Participants Based on GEM (2007 and 2008), World For Rockwell, position has declined from 2007 to Position in 2007 Position in 2008 2008 but the prospects for future trend are very high 10 due to enhanced product portfolio through acquisitions Even though ABB had a phenomenal year in 2007, changes in the leadership and lack of focus on the Honeyw ell Emerson Growth Strategy Excellence implementation strategy were a drag on its position in Siemens 2008 ABB Schneider Invensys’s future trend is looking slightly Invensys Rockwell downward due to low order book and its cyclical effect in rail division 5 Yokogaw a Schneider continues to improve its position year over year, and has strengthened its position in its strongest vertical-power generation, transmission and distribution Yokogawa is continuously losing its overall position with a weak balance sheet and modest forecast 0 Siemens is and has continued to implement better 0 5 10 growth strategies and best practices despite senior Implementation Excellence management realignment 22
  23. 23. Comparison 2007 & 2008 (contd.) Honeywell Yokogawa Honeywell Velocity Product Development™ has been Yokogawa’s continuous fall in share holder value, deployed throughout their businesses, reducing cycle despite better top line growth in local currencies, is times and accelerating release of more than 300 new because of the intense price pressures in Asia and products in 2007, up 46% from 2006. willingness to take projects in the US at lower margins. For Honeywell, the scope of Integrated Main Automation Contractor projects increased by 20% at ABB new and existing facilities across a number of industries, ABB had a growth rate of over 18% in comparison to including oil & gas, power, and life sciences. 2007 owing to its wins in power industry. The strength of its products in power generation and transmission, along with increased orders from North America, aided Rockwell Automation its growth. Rockwell Automation is trying to reverse its decline by strengthening its product offerings through acquisition Siemens of Incuity, ICS Triplex, and Pavilion Technologies. It has fallen slightly due to slowdown in North America, its Siemens’s Product Life-cycle Management product largest market. portfolio, along with SIProcess, enhances its position as total solution provider. 23
  24. 24. CEO / CSO Response to GEM Analysis “The GEM matrix has reduced lots of factors into a useful clean and simple picture.” Peter Zornio Chief Strategy Officer Emerson Process Management 24
  25. 25. www.frost.com/gilglobal GIL GLOBAL 2009 A global community focused on Growth, Innovation and Leadership May 2009 October 2009 Kuala Lumpur London October 2009 September 2009 Shanghai San Francisco October 2009 December 2009 Middle East Sao Paulo February 2010 October 2009 Tel Aviv India 25
  26. 26. Next Steps Request a proposal for Growth Partnership Services to support you and your team to accelerate the growth of your company. Attend Frost & Sullivan Executive MindXchange best practice networking events (http://www.frost.com/cal) to share and address strategic challenges Consider Conducting a 360 Degree Growth Workshop to support your long-term growth strategy Join us at a Growth, Innovation and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth (www.frost.com/gilglobal) Register for the next Chairman’s Series on Growth: (http://www.frost.com/growthapac) Schedule a Recession Strategy Session with a Frost & Sullivan Industry consultant (email us: alvin.chua@frost.com) Schedule a One-on-One Growth Strategy Dialogue with a Frost & Sullivan Growth Consultant (email us: alvin.chua@frost.com) Register for Frost & Sullivan’s Growth Opportunity Newsletter and Growth Team Membership e Bulletin to keep abreast of growth opportunities in your industry and best practices in your career track. (www.frost.com) 26
  27. 27. Contact Us If you have questions or would like further information about anything we discussed, please send your query to the email provided below and we will get back to you shortly. Alvin Chua Account Manager Automotive, Transportation & Logistics DID: +65 6890 0997 Mob: +65 9199 4566 eMail: alvin.chua@frost.com 27