High-growth companies are targeting double-digit growth in fiscal 2023 despite economic turbulence. To succeed, they’re uniquely leveraging strategic diversification, collective leadership and their ability to thrive amid stressors and shocks.
The 2022 Gartner Understanding Corporate Growth Strategies Survey shows 37% of business leaders expect to increase revenue by 10% or more in fiscal 2023. Another 38% expect growth of 5% to 10%. The 37% who are high-growth companies deploy three practices to propel their growth goals:
Establish collective executive responsibility for growth.
Diversify strategies and portfolios.
Embed “antifragile” practices into operating models, which increase the enterprise’s ability to respond and even thrive amid a range of external operating conditions.
High-growth companies pursue growth as a team sport
At high-growth companies, a range of senior executives are perceived to drive corporate expansion, while most low-growth companies depend more heavily on the CEO to lead. Perceptions of executive contributions vary, though. For example, CIOs and CFOs rate their importance significantly higher in leading growth than their peers rate their contribution to driving growth.
Encourage the executive team to pursue growth individually and collectively by adopting joint goals and a shared growth agenda, and by distributing that agenda among multiple executives.
Improve your political savvy and leadership skills. Develop emotional intelligence, encourage a culture and incentives that promote collaboration, and relieve the CEO of the burden of being the growth hero. Also, engage with fellow executives to determine if you contribute more than they realize or not enough.
High-growth companies diversify strategies and portfolios
During periods of market turbulence, low-growth companies turn their attention inward, retrench operations and focus on what they know. By contrast, high-growth companies find their way through by looking for what’s new and different.
For example, high-growth companies are significantly more likely to experiment with new business ideas and business models and to leverage learnings from other industries. High-growth companies are also significantly more apt to rate digital activities as very or extremely important to growth.
Look outside your immediate market for opportunities to grow (that is, develop brand new markets), and explore a few of them promptly. Extend your existing product functionality, and take greater risks when launching new products, such as by experimenting with new business models or attacking new markets.
Run more small, safe experiments, both internally and with clients and products, accepting that that is the only way to learn in uncertain times.
High-growth companies embed antifragile practices
Antifragility refers to a set of practices that allow the enterprise to evolve in the face of uncertainties and shocks, with the goal of creating more value, as opposed to risk management, which focuses on protecting the status quo. Consequently, antifragile enterprises do more than bounce back from external shocks — they exploit such shocks for competitive advantage.
In many ways, high-growth companies, more often than their low-growth peers, practice antifragility tactics, such as using diverse talent to listen for weak external signals and deploying “red teams” to simulate the role of a competitor and surface endemic vulnerabilities.
Introduce stratagems that promote antifragility by bringing the uncertainty inside the enterprise, valuing optionality and experimenting to learn.
Incorporate sustainability into your business strategy. Determine how you will use it to drive growth, such as by making existing products more sustainable and making brand new products sustainable from the get-go.
From the Desk of Dave Aron, Distinguished VP Analyst
“Some business leaders are reporting ambitious growth goals despite persistent economic uncertainty. High-growth companies are more likely than lower growth companies to view macroeconomic uncertainty as a source of opportunity, look to unexplored markets, take greater risks for launching new products and use more flexible up-market and down-market pricing strategies.”
3 Things to Tell Your Peers
1. High-growth companies are targeting double-digit growth despite economic turbulence.
2. Mirroring practices of high-growth companies could help propel your growth strategies.
3. Three practices stand out among high-growth companies: strategic diversification, collective leadership and embedded antifragility.
Dave Aron is a VP and Gartner Fellow in the CIO Research group, focusing on digital business and innovation. Aron is a thought leader on digital business strategy. He helps boards and CxOs understand and engage with advanced business and technology topics, such as the impact of the digital dragons, the rise of digital China, antifragility, business dynamics and real options.