The Six Disciplines blog has moved!

You will be automatically redirected to our new home. If that does not occur, please visit:

Tuesday, February 09, 2010

Achieving Sustained Growth - Take Two



As reported in the Harvard Business Review's Daily Stat, the consulting group Bain's updated global database of Sustained Value Creators found only 12% of companies worldwide managed to grow profits and revenues more than 5.5% over the 10 years and earn back their cost of capital. 

Here's another take on the same issue: 

As reported in the best-selling book Six Disciplines Execution Revolution, (How Big Is The Challenge, page 29), a recent McKinsey study concluded that few large global companies outperform their competitors on both revenue growth and profitability over a decade. The consulting firm analyzed 1,077 companies according to revenue growth, profitability, and both measures. This study concluded that thirty of these companies were superior, based on growth over this period. Ninety-nine were superior performers by profitability. And only nine (.008 percent) out of 1,077 companies were superior in both categories.

BOTTOMLINE: Achieving sustained, profitable growth is very challenging, and the odds of success are low.  Achieving such balance and predictability is extremely difficult, and therefore, extremely rare. While this fact may be viewed as a deterrent to some, it provides insight into an enormous opportunity for building a business that executes more predictably than most. 

No comments: