In June 2008, the SBA published a new report: High-Impact Firms: Gazelles Revisited.
This new study revisits and expands upon some of the conclusions about rapidly growing firms conducted in the 1980s. Specifically, this report examines firms with significant revenue growth and expanding employment.
The revealing research findings about “high-impact firms” are summarized as follows:
- They are relatively old, rare and contribute the majority of overall economic growth.
- They exist in all industries, in almost all regions, states and counties.
- They represent only 3% of all firms, yet they account for almost all private sector employment and economic growth in the economy.
- On average, they are 25 years old.
- They usually go through a 4-year growth phase, in which time, growth doubles.
- In the four years after a high-impact firm undergoes its high-growth phase, only about 3 percent die.
- 75% of them fail to sustain their high-impact status after the 4-year growth phase.
For community organizations that have a strategy focused on an economic development platform, the implications and benefits of acting on this data are significant. Those who do will recognize the value of cultivating high-growth firms versus trying to increase entrepreneurship across the board, or trying to attract relocating companies.
Following are some game-changing implications for your community organizations to consider, particularly before going into next year’s strategic planning process:
- What kind of impact could your organization have on your community’s economic development if you could help to cultivate the number of local high-impact firms from say, 3% to 4%, or perhaps even 5%?
- What if your community organization could recommend systematic approach to enable companies to get to the high-impact stage sooner -- and stay there longer?
BOTTOMLINE: The answers to both of these questions are outlined in the new bestselling book, Six Disciplines Execution Revolution. Growing the number of high-impact firms, getting them to the high-impact stage sooner, and getting them to stay there longer, are all essential drivers behind the revolution in strategy execution that’s already underway.
Find out more by attending an upcoming webcast.