There is no doubt that Omicron has impeded most economic recovery efforts. Just in the past month alone, news agencies have reported that the COVID-19 variant has slowed business growth in the United Kingdom to its most glacial pace in a year and the International Monetary Fund has adjusted its global growth forecast to a modest 4.4 percent amidst higher inflation rates and positive case numbers worldwide. Here at home, the Philippine Statistics Authority has likewise downgraded its third-quarter gross domestic product (GDP) growth figure from 7.1 percent year-on-year to 6.9 percent.
By all accounts, it seems the world’s economies are once again in a downtrend, but that does not necessarily mean businesses have to delay the execution of their growth strategies too. Reports from McKinsey show that so long as companies are in a position to allot funds away from the immediate crisis response, then investing in growth at this time could offer the best results. It is just a question of how. Let us walk through some crucial steps in order to come up with a growth strategy that holds firm.
Form strong partnerships and collaborate
To paraphrase a familiar adage, no innovative business is an island entire of itself. As discovered by an IBM study, 58 percent of outperforming Filipino CEOs acknowledge the growing importance of partnerships and executives worldwide expect to grow their business ecosystems by leaps and bounds in 2022 compared to previous years. Thus, there seems to be a consensus that partnerships are a top priority in order for businesses to drive growth going forward.
As defined by Forbes experts, a business ecosystem is a network of independent actors – such as suppliers, regulatory bodies, competitors, and other stakeholders – who interact and grow by way of competition or cooperation. By collaborating with other companies, the involved parties can gain more traction by bundling their adjacent and complimentary services together to solve a wider net of customer needs. Even beyond the immediate act of creating new products and services, the communication and exchange of information inherent in an ecosystem provide a wealth of knowledge that can significantly differentiate a business’ value proposition and allow them to “coevolve” with their peers.
Invest in business analytics
Speaking of utilizing information to grow and improve businesses, keeping an eye on the key performance indicators of a company may reveal new avenues for growth. Sales numbers and operational efficiency metrics by themselves can paint a portion of a picture, but when you measure all factors involved in your business and benchmark them against comparable competitors and industry averages, the picture becomes even clearer. It is then easier to identify gaps in your operation.
The same practice also applies to growth marketing, according to Forbes writer John Hall, wherein businesses study the analytics of their marketing campaigns to determine which aspects lead to higher engagements and conversions. The Forbes Coaches Council notes that it is even possible to benchmark the roles within an organization to determine individuals who might be incompatible with the known characteristics of success in each particular role.
Going beyond this manual analysis of data, I have shared in a previous article about the role of Big Tech in companies. I believe that artificial intelligence and predictive analytics could provide useful insight for internal processes and even high-level corporate governance decisions.
Set growth targets and trickle down
Another reason to benchmark company numbers against market leaders and even against disruptive yet top-performing companies in different industries is for the decision-makers to see the current reality of the market and set their growth targets accordingly. That reality as we all know is that we are in unprecedented times, and basing strategies on precedents, such as an individual company’s historical year-on-year sales or performance, is not reliable anymore nor is it effective considering the buzzing potential of the market. More to the point, a bold and far-reaching zero-based approach to both planning and budgeting has the potential to yield greater growth compared to traditional strategies, if done correctly, according to McKinsey.
Make sure to communicate timely the information and targets with the rest of the company. Emphasizing the period’s growth targets to staff members ensures a cohesive implementation of the strategy, and it could also help create a culture wherein staff are equally invested in the overall success of the organization. Go one step further and empower managers to draft initiatives pertaining to their own departments and backed by on-the-ground knowledge of their operations. McKinsey projects the resulting individualized plans will deliver 130-150 percent of the original target.
Everything considered, an effective growth strategy involves a data-driven approach and a healthy helping of optimism to implement big changes throughout the company that would affect its daily operations and culture. It also requires quite an investment, as even just the pre-planning stage of gathering information and finding the relevant statistics and profiles of industry leaders to benchmark against requires time and money. However, if done right, companies may find themselves in the enviable position of coming out of this downtrend in much better shape and size than ever before. Perhaps counterintuitive and very challenging, but business growth amidst economic downturns is possible.
As published in The Manila Times, dated 02 February 2022