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The winning formula for growth: course, capability and conviction

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Purpose ‐ This study of the growth history and practices of 1,238 companies over a decade by the IBM Institute for Business Value found that top growth companies excel in three vital areas: course, capability and conviction. IBM calls this the "3Cs model." Design/methodology/approach ‐ The IBM research team developed a database of growth and shareholder return performance for companies included in the S&P Global 1200. Starting with the 2003 list, the team added the firms that "fell off" the listing over the preceding decade. The study worked with a final list of 1,238 companies with complete data over the decade. Collectively, this group recorded median annual revenue growth of 8.5 percent and median TSR growth of 8.8 percent. Findings ‐ The most successful growers: have a clear point of view on their industry, addressing both where it is headed and how they will create value in its new form or environment; are iconoclasts who evolve their product-market portfolio on an ongoing basis; sustain the growth quest by developing multiple growth initiatives that are backed by ongoing cost and asset management to create funding; foster a culture that responds to the necessity of change, and a cadre of leaders with the passion and follow through to make the change stick Research limitations/implications ‐ The article provides a sound intellectual background for researchers who want to compile in-depth case studies. Practical implications ‐ The article advises corporate leaders to: assess their company's status against your growth ambitions and the 3C model winners follow; develop a point of view on the future and its opportunities; evolve your product market portfolio and initiatives; develop a competitive model; get to know your capabilities and align them with opportunities. Originality/value ‐ Contrary to conventional wisdom, firms with the will to be successful growers can break free of perceived constraints related to size, industry boundaries and geographic neighborhood.

Keywords: Assets management; Budgetary control; Business development; Product management

Document Type: Research Article

Publication date: 01 January 2006

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