HBR On Strategy The Key to Consistent Growth Is Having the Right Incentives
13 snips
Apr 3, 2024 Ken Favaro, strategy expert, discusses the importance of incentivizing organic growth within organizations. He emphasizes the need to avoid labeling business units and highlights strategies for consistent growth, including balancing growth engines and nurturing cash cows, and overcoming resistance during challenging times.
AI Snips
Chapters
Transcript
Episode notes
Understanding Organic Growth
- Organic growth means growing revenue without mergers or acquisitions. It's crucial due to tougher economic conditions like high interest and sovereign debt.
- Companies must focus on boosting internal growth strategies to overcome current macroeconomic headwinds.
Fund Growth Through Cost Savings
- Make organic growth "free" by allowing reinvestment of cost savings into growth initiatives. This reduces the barrier of upfront P&L expenses hitting the bottom line.
- Reward operating units for cutting unnecessary costs by letting them fund innovation and marketing with those savings.
Gillette’s Growth Funding Approach
- Gillette under Jim Kiltz let business units keep half the cost savings for innovation.
- They also had a corporate scholarship fund for extra investments that operating units otherwise would not fund.