growth is every ceo's challenge - deloitte consulting presentation

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©2013 Deloitte Touche Tohmatsu Limited. All rights reserved.

Growth is every CEO’s challenge

Lessons in growth

October 2013


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Growth in turbulent times!

Growth Lessons from the Trenches

What does the research say?



Growth is critical for TSR



Equity markets demand growth



Spinning straw into gold is not easy!

Over the period 1987 – 2005, Deloitte

researched close on 5,000 companies in the

USA to establish patterns of growth and

critical success factors

Companies that attained critical mass (more

than $250M) have a greater chance of

surviving

Of the companies that survived, only 27%

experienced high growth that is two times

that of market CAGR. Among companies

analysed, only 6% achieved performance

enhancing growth over the long run i.e.,

growth that also improves the bottom line

and key performance metrics



Growth stalls are common and

troublesome 87% of historic Fortune100 and Global 100

companies hit some type of growth stall*

between 1955 and 2006

More troubling are the long-term effects of

growth failure: 54% of companies that

experienced growth failures posted slow to

negative growth during the 10 years after the

growth stall occurred

* A “stall” is defined as the moment in time that represents a turning

point, or significant downturn, in corporate revenue growth



Causes of growth stalls can be

managed In total, 87% of the factors that most often

contribute to growth failure are within

management’s control



Building the right internal capabilities

to execute is critical to success



Beating market growth expectations

and closing the “Growth Gap” is key



Matching risk appetite with ambition



Constructing a growth portfolio that

aligns with your risk tolerance

All three portfolios will provide the same projected annual revenue growth


©2013 Deloitte Touche Tohmatsu Limited. All rights reserved. White markers indicate position of

Deloitte Drawing Guides

7.40 cm

2.91 Inches

6.00 cm

2.36 Inches

8.00 cm

3.15 Inches

11.70 cm

4.61 inches

0.50 cm

0.2 inches

0.50 cm

0.2 inches

11.70 cm

4.61 inches

To view Deloitte drawing guides:

1. Right-click on slide and select ’Grid

and Guides...’

2. Check ’Display drawing guides on

screen’

3. Select ’OK’

Growth in turbulent times!

Growth Lessons from the Trenches

What does the research say?



This factor drives 90% of success or

failure of any growth initiative



ENSURE ACCESS TO A BANKER 6

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7 USE

TECHNOLOGY TO MAXIMISE

RESULTS



REWARD THE RISK TAKERS 8



IF YOU MUST FAIL, FAIL QUICKLY 9

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RESULTS CHANGE CULTURE,

COMMUNICATE 10



GROWTH LESSONS FROM THE TRENCHES



Black swans are the norm, not the exception Everything is being commoditised Great customer service has become table steaks, not a differentiator

Change happens FAST



There is unprecedented volatility

wherever you look

The connectivity revolution is changing

the world as we know it!

Technology is changing the very fabric

of our societies – FAST!

Change happens FAST



People don’t trust banks and the government

anymore

To stay ahead, eat yourself before someone

else does!

Industries are converging – where is yours?

Growth requires a fresh perspective

Change happens FAST



“Do you remember 2013?” Ethnic conflicts, AIDS and terrorism

Disillusionment with government

Human politicians…the end of heroes

Businesses more powerful than governments

End of ‘nationalism’ and an explosion of

new ‘borderless’ loyalties

This was the realisation of the age of the individual – “I want it all

and I want it now”!

Democracy and technology were the catalysts!

Change happens FAST



71% of TSR comes from REVENUE growth

Many companies have to run twice as fast just to stand still!

Outperforming the market is difficult – you need to build special capability

Growth stalls are common – and troublesome!

Much of what creates growth stalls can be controlled by management

Portfolio, portfolio, portfolio!!!

….and what about growth?



1. Metrics and targets drive success! Starting with a clearly articulated growth target is crucial for galvanising the organisation.

2. De-link Business of Today from the Business of Tomorrow! Recognise that the two are very different. One typically leads to incremental growth, the other to quantum growth.

3. Deploy the right dedicated resources! Rotating high fliers through a growth office is both transient and sure to be unsuccessful. Growth requires a combination of different skill sets.

Growth lessons from the trenches



4. Seek widely for opportunities! You can’t simply extrapolate from the past. The most powerful successes are not predictable. Taking risks is safer than doing nothing!

5. Make the growth process repeatable and sustainable! Setting up a governance process to make investment trade offs in a considered approach helps an organisation to manage risks.




6. Ensure access to the banker upfront Corporate antibodies focused on the business of today are sure to win the battle for investment capital. Spinning straw into gold takes time and investment – have your lines of credit agreed upfront!

7. Use technology to maximise results A digital skin with one internal clock that runs 24x7x52. Use the entire technical resource base at your disposal.

8. Reward the risk takers Innovation for growth requires a different approach to recognition and reward!




9. If you must fail, fail quickly Time really does equal money. Avoid pet projects driven by politics and be in the business of killing ideas as soon as possible!

10. Results change culture – communicate! Culture is driven by leadership delivering results. Celebrate success, make heroes of staff who deliver results.





11. Search for the hero inside yourself!

OOOOOPS…almost forgot



The world is changing at break-neck speed

Change brings boundless opportunities to grow your business in the competitive jungle!

Will you grow?



Remember, the future should be a matter of choice and not chance… …and growth is too! So…



Thank you!

Michael Vincent Director | Deloitte Consulting (Pty) Ltd

2013 Innovating for growth



“Everything you

want is just outside

your comfort zone.”

Robert Allen

growth is every ceo's challenge - deloitte consulting presentation

Business

growth lessons

growth gap

growth initiative

patterns of growth

growth failures

growth portfolio

type of growth stall

market growth expectations