Most companies are constantly in the process of improving their growth and innovation capabilities to ensure they keep up with market demands and competitive dynamics as long as keeping and defending their competitive position.
Understanding the current state of your growth and innovation capabilities needs a comprehensive approach. There are multiple ways to go about it. From our experience working with executives and companies around the world, we have identified 8 key dimensions that when properly evaluated, allow management to accurately asses the current state of their capabilities, evaluate gaps and craft improvement plans.
These 8 dimensions are:
1. Strategy context and focus: your growth and innovation strategy should be a direct result of a clear, actionable and well articulated corporate strategy. You may find it surprising, but many companies of various sizes and industries do hot have a clear strategy and lack focus and direction. This is particularly problematic as the corporate strategy drives the overall direction of the business, resource allocation and investment prioritization and specific requirements to deliver performance such as new offerings, people and processes.
Where to play? Which business should we be in? Where we want to be in 5 years? What are the pillars and competitive differentiators that will allow us to achieve the main strategic goals? These are examples of questions that a well-thought strategy should be able to answer.
2. Customer centricity: growth oriented companies understand that they exist to deliver real value by addressing the needs and requirements of their target customers. Customer-centered organizations understand this and make a significant effort to constantly track and understand customer dynamics. Thus allowing them to properly craft valuable and relevant solutions and products.
3. Competitive context: companies do not operate in a vacuum. They need to continuously understand emerging competitive threats and opportunities in the marketplace.
Growth oriented companies tend to have strong and on-going market sensing capabilities that help them to keep track and react earlier to significant changes in competitive dynamics. They fully understand who their competitors are, what they do and don’t do well, how similar or different they are and most importantly, how they can win given their own positioning and capabilities.
4. Organization and structure: the way the company is organized should be a response to their competitive strategy. A main challenge companies typically face is the issue of alignment in terms of the coordination and connections between different units, geographies and functions around corporate objectives. Additional specific issues may include divisional/SBU autonomy and SBU diversity.
5. Culture leadership and language: the role of culture is central for the success for growth oriented companies and needs to be taken more seriously than it is usually is. It describes the current ways of behaving, feeling, thinking, sharing and collaborating across the organization towards identifying and executing on growth opportunities. Issues such as risk-taking tolerance, attitudes towards success and failure, internal communications and rewards systems tend to be common areas for improvement.
6. Team management practices: effectiveness in managing teams is the base of company’s competitive advantage as in globalized world sustained growth depends on the company’s ability to properly coordinate critical resources and information that are spread across different locations.
Typical challenges companies face include their ability to create, sustain and evaluate high-performing teams, overcoming cultural and communications barriers and managing performance in virtual / global settings.
7. Management processes and metrics: growth minded companies tend to have in place simple, straightforward, well-crafted processes to identify, articulate, document, evaluate and execute on growth opportunities. This usually includes emphasis on three main core processes:
8. Support systems and tools: to close the loop and be effective in executing enhanced growth and innovation capabilities, companies need to have the adequate support systems and tools that enable the following:
a. Proper team interaction
b. Solid decision-making
c. Adequate cross-functional alignment
d. Agile management
e. Secure knowledge management
By focusing in the above dimensions, properly executed, in a matter of weeks a company could have a comprehensive assessment of their internal growth and innovation capabilities, identify gaps and build shot-term plans for improvement.