RGM

Recent research from the Columbia Business School concludes that fewer than 1% of large, publicly-traded companies deliver consistent growth over time. In fact, only 8% of nearly 5,000 companies studied achieved five percent growth or better two years running, and only 4% of companies managed the feat for five consecutive years. Sadly, a paltry ten (10) companies achieved growth of 5% or better for a decade.

How do the “growth outliers” do it? “On the one hand, they’re built for innovation,” says Rita Gunther McGrath, a Columbia professor and one of the study’s authors. "On the other hand, they’re extremely stable. Chief executives have come up through the company; strategy and organizational structure stay consistent for long stretches; client retention is unusually high; and the corporate culture is strong and unchanging."

This new research aligns with our findings that the internal issues of alignment, focus, courage and consistency are critical to corporate success. Of course, if these things were easy to maintain every company would do so. Still, both this study and our own demonstrate that ignorance of the true drivers of corporate growth is still widespread. Steady gains come not merely as a result of brilliant strategy or amazing innovation, but a steady hand at the wheel and a strong culture behind it.

How does your company measure up on these critical metrics?

If you’d like a quick analysis, take a simple, confidential self-diagnosis here. If things aren’t firing on all cylinders at the moment, it may give you a sense as to why.

• Posted: Thursday, March 01, 2012

Rita Gunther McGrath has been named as a Top 50 Business School Professor on Twitter by MBA Programs here.

• Posted: Sunday, February 12, 2012

According to research published in Harvard Business Review about how many publicly traded companies with a market capitalization of at least US$1 billion have grown by at least 5% each year over the last ten years, Cognizant is among the ten companies—the "Growth Outliers" —that have shown steady, predictable growth over all of the last ten years. A total of 2,347 companies qualified for the research. Cognizant is also one of the five companies that grew both revenues and net income every year. "Steady, predictable growth is what every big company strives for and what investors prize above all else," writes Rita Gunther McGrath, a strategy expert and professor at Columbia Business School, adding that the outliers "defied the odds by achieving steady growth for 10 years running."

• Posted: Sunday, February 12, 2012

The results of the research conducted by a renowned business magazine Harvard Business Review ranked Krka Group among the ten elite companies in the world with stable annual growth between 1999 and 2009. The magazine states that big companies strive for stable and predictable growth, which is what investors prize above all else. However, the contrast between what investors expect and what the vast majority of companies deliver is considerable, which is why the author of the research Rita Gunther McGrath thinks that factors which contribute to corporate performance should be reconsidered. She emphasizes that steady, continual growth is difficult to achieve even at modest rates, never mind by the double digits that companies are fond of promising. On one hand, the research has identified common traits that they do have and those that they do not. To read the entire article, click here.

• Posted: Sunday, February 12, 2012

A January 30, 2012 article by Financial Times on the subject quotes Rita McGrath: “Innovation needs to be treated as material and systematic, not an on-again-off-again process,” says Columbia Business School’s Ms McGrath. The vested interests inside corporations arrayed against disruptive change can be powerful. To read the entire article, click here.

• Posted: Thursday, February 02, 2012