how organisations can balance cost
      grow sustainably & profitably   efficiency with innovation to grow
                ...
Many organisations run into   :: costs grow faster than revenues
                                       :: cost-efficiency ...
Case 1: Cost-efficiency focus / stifled innovation

             “Defenders of Six Sigma at 3M claim that a more systematic
...
Case 2: Growth focus / lack of cost-discipline
           Company X financial performance 2004-2008
                       ...
Often the biggest tension is for mid sized companies

                                                           Next S cu...
How can companies
      grow sustainably?

      • excell growth partners undertook
        research into best practices i...
Leadership and execution
                 Strategic focus                                Learning and
                 and...
Three solutions - but only one is ultimately sustainable

       1. Cost-efficiency focus           2. Revenue growth focus...
some best practices for   :: extracts from research findings
                                    :: whitepaper provides det...
Leadership &      The right Leadership Team to build and nurture a diverse
                     execution      organisatio...
a closer look at each
                                side of the cube
Sunday, 22 November 2009
Leadership &
      execution

      • Diversity & integration


      • “Whole brained” approach


      • Balanced extern...
Strategic focus &
      innovation

      • Strategic ambition & priority


      • Balanced portfolio of innovation


   ...
Learning & growth

      • Ranges of diversity with integration


      • Coach rule following vs. breaking


      • Doin...
Internal focus
      (operations)

      • Depending on scope / type of
        innovation:


            • Differentiated...
External focus
      (ecosystem)

      • Balanced portfolio of customers


      • Balanced portfolio of alliances


    ...
Financial management
      & measurement
      • Understand financial growth drivers


      • Aligned financial / strategic...
some tools for assessment &   :: self-assessment questionnaire
                                   :: white paper/detailed ...
excell growth partners                  contact us to explore further
                                              phone ...
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grow profitably and sustainably with less

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How does your organisation manage the tension between growing the top line and containing costs? Many organisations struggle with the different approaches required for each. excell growth partners conducted research into best practices over the last few months, and the key insights and best practices are summarised in this brief presentation. Visit www.excellgrowth.com to explore further.

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Transcript of "grow profitably and sustainably with less"

  1. 1. how organisations can balance cost grow sustainably & profitably efficiency with innovation to grow profitably with limited resources with less © excell growth partners 2009. All rights reserved. Sunday, 22 November 2009
  2. 2. Many organisations run into :: costs grow faster than revenues :: cost-efficiency v growth tension trouble when growth slows :: difficult to get balance right Sunday, 22 November 2009
  3. 3. Case 1: Cost-efficiency focus / stifled innovation “Defenders of Six Sigma at 3M claim that a more systematic new-product introduction process allows innovations to get to market faster. But Art Fry, the Post-it note inventor, disagrees. He places the blame for the recent lack of innovative sizzle squarely on Six Sigma application in 3M research labs.” A Struggle Between Efficiency And Creativity - BusinessWeek 2007 “3M’s share of revenue from new products introduced in the last 5 years fell from a third to a quarter” Sunday, 22 November 2009
  4. 4. Case 2: Growth focus / lack of cost-discipline Company X financial performance 2004-2008 • Excessive emphasis on top-line growth 30000 • High level of unfocused 20000 innovation activity 10000 • Achieved growth, but at £ thousands 0 a cost - due to inefficiency -10000 -20000 • Only made an operating -30000 2004 profit in one year 2005 -40000 2006 2007 2008 • Sustainability? Revenues Operating costs Operating profit Sunday, 22 November 2009
  5. 5. Often the biggest tension is for mid sized companies Next S curve Tricky middle Late stage Early stage ground market market Revenue Revenue Revenue growth growth growth slowing potential is key limited Costs Cost base become Cost focus relatively more becomes key small important Sunday, 22 November 2009
  6. 6. How can companies grow sustainably? • excell growth partners undertook research into best practices in Summer / Autumn 2009 • The research / analysis drew on: • Our own industry & consulting experience over the last 20 years • An extensive literature review of previous research • Interviews with selected organisations to explore current best practice & learning points Sunday, 22 November 2009
  7. 7. Leadership and execution Strategic focus Learning and and innovation growth (people) Internal focus External focus (operations) (ecosystem) Financial management and measurement It’s a complex puzzle, but :: like rubik’s cube :: 6 dimensions need to be aligned there are ways to solve it :: beware of multiple solutions! Sunday, 22 November 2009
  8. 8. Three solutions - but only one is ultimately sustainable 1. Cost-efficiency focus 2. Revenue growth focus 3. Profit growth focus Revenue R R Profit P P Cost C C - Revenue growth not a priority - Cost growth not a priority - Cost and revenue are priorities - Profitability may decline - Profitability may decline - Profitability grows - Potentially unsustainable - Potentially unsustainable - Sustainable Sunday, 22 November 2009
  9. 9. some best practices for :: extracts from research findings :: whitepaper provides detail sustainable profitable growth :: see later how to access this Sunday, 22 November 2009
  10. 10. Leadership & The right Leadership Team to build and nurture a diverse execution organisation that can both create and execute. Strategic focus & Learning rapidly and pragmatically about the best areas for innovation profitable growth and innovating up to business model level. Learning & growth An ideal mix of people,in terms of personalities and know how, (people) within a culture of positive challenge and improvement. Internal focus An operational set-up that is carefully designed to balance needs (operations) of growth and efficiency in different parts of the organisation. External focus Orchestrating an ecosystem of alliances that complements core (ecosystem) capabilities to deliver high value at low cost to customers. Financial management & Smart acquisition and balanced allocation of financial resources. measurement Managing risk and reward between growth and cost-efficiency. what good looks like: summary Sunday, 22 November 2009
  11. 11. a closer look at each side of the cube Sunday, 22 November 2009
  12. 12. Leadership & execution • Diversity & integration • “Whole brained” approach • Balanced external & internal focus • Exploration & execution • Management of failure • Role modelling Sunday, 22 November 2009
  13. 13. Strategic focus & innovation • Strategic ambition & priority • Balanced portfolio of innovation • Capability-driven and ecosystem- drive idea generation • Pragmatic testing of new ideas • New business models / partners • Discovery driven planning Sunday, 22 November 2009
  14. 14. Learning & growth • Ranges of diversity with integration • Coach rule following vs. breaking • Doing right things vs. getting results • Engage / involve in strategy • Zoned working environment • Performance management Sunday, 22 November 2009
  15. 15. Internal focus (operations) • Depending on scope / type of innovation: • Differentiated organisation • Differentiated processes • Innovation “model” • Management control alignment • Practical ways to manage risk • Knowledge management systems Sunday, 22 November 2009
  16. 16. External focus (ecosystem) • Balanced portfolio of customers • Balanced portfolio of alliances • Clarity on what can be shared • Modular offerings / flexible supply • Smart outsourcing • “Open innovation” philosophy Sunday, 22 November 2009
  17. 17. Financial management & measurement • Understand financial growth drivers • Aligned financial / strategic priorities • Appropriate reinvestment of savings • Understanding the value of innovation as well as the costs • Balanced scorecard with problem solving tools to address tensions Sunday, 22 November 2009
  18. 18. some tools for assessment & :: self-assessment questionnaire :: white paper/detailed findings performance improvement :: leadership team workshop Sunday, 22 November 2009
  19. 19. excell growth partners contact us to explore further phone :: +44 7768 171334 email :: research@excellgrowth.com grow sustainably & profitably with less web :: www.excellgrowth.com Sunday, 22 November 2009

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