Ready for Growth, But Not Prepared

Extracted 27JUL2011 from http://blogs.hbr.org/hbr/mcgrath/2011/07/ready-for-growth-but-not-prepared.html

Rita McGrath worked with Accenture on a study of its largest clients to learn what the leaders of these mega-corporations had on their minds amidst all of the uncertainty they face...

Companies seem to recognize that sticking with the core businesses alone will not get them to their growth objectives. They expected only 45% of their growth to come from extending existing lines of business to existing customers. The rest would be made up by new products and services (24%); entry into new geographies (17%); and appealing to new customer segments (14%). In particular, most respondents expected growth in emerging markets to become more important, as the underlying growth rate in developed economies remains sluggish. Interestingly, the work of many observers suggests that venturing into such new spaces may be far more difficult and risky than companies anticipate, particularly if they are counting on substantial growth...

The responding firms' lowest-rated capabilities were in managing merger integrations. (This response matches tomes of academic research that cite integration as the devil in the merger details.) Companies are better at hunting down targets and bringing them home than they are at figuring out what to do with them after that.