The Granularity of Growth

The Core Challenges of Growth

Growth is tough for any company, but due to sheer scale, it is even harder for a large, mature company to keep growing at anything like the rates it demonstrated in its early years. The longer a company is in business, the likelier it is to be in a mature field where innovation evaporates. If you lead a large company, how can you make it grow?

First, define growth broadly – it is any increase in profits, no matter how you acquire them. Second, focus on granularity, which means looking at your business in a more “fine-grained” fashion, so that your analyses contain more elements. This focus will reveal more “pockets of opportunity.” Most strategic thinking about growth, in either mature or young industries, is too broad to be useful. Mature industries have small areas that are growing and even young “growth” industries have stagnant areas.

Revenue growth is essential for corporate survival. In a study of U.S. companies over the course of two business cycles, 1984-1994 and 1994-2002, the companies with both revenue growth and high stockholder value generation (“growth giants”) were far more likely to survive than those with only one...