Achieving Growth and Optimization in today’s environment is achievable, but you must focus on both elements. This is the key to outperforming your competitors in these tumultuous times.  Our sister company Clarkston Consulting has written a comprehensive article which can be found on their recent industry insight.  We have summarized this article below by outlining a set of five components to help you outperform your competitors approx. 2.8x faster than your peers (Figure 1).  Contact us to engage an SME to help you Balance Growth and Optimization in your organization. Visit our Book A Project page to learn more for your specific needs, SAP or otherwise.

Figure 1: Out of the 380 S&P 500 companies analyzed, 22 companies outpaced their peers by 2.8x during the last recession (2007-2010).

Clarkston analyzed S&P 500 companies during the ’07- ‘09 recession to understand which companies were able to outperform the market, what they did, and how and why they were able to do so.

Experts found that any company can rise to become a market leader in a time of crisis. Of the less than 6% of organizations who managed to grow both total enterprise value and stock price during the recession, 70% were categorized under the CPG & retail and life sciences sectors (figure 2).

Figure 2:  Almost 70% of the 22 companies identified as winners during the 2007-2009 recession came from the CPG/Retail and Life Sciences sectors.

The patterns Clarkston found in what made companies successful during uncertain times were for Life Sciences organizations, a combination of well-timed M&A activity, robust product launch pipelines, and the right mix of commercial capabilities enabled winners to get their therapies to patients and grow faster than their peers.

In the Retail and CPG sector, brands that delivered on functional elements of the shopping experience (e.g., convenience, functional performance, and the right value equation) and connected with the customer on a deep emotional level were more successful than their peers.

Five Factors to Improve the Odds for Success of Growth and Optimization in Uncertain Times

#1: For Growth and Optimization – Invest for the future.

Balance daily operational needs with investments for the future.  Do not restrict investments. 55% of the companies that outpaced the market during the recession grew their capital expenditures year-over-year at the height of the recession, while only 22% of their peers did the same (figure 2).

Figure 3:  55% of the winning companies in our analysis grew their capital expenditures at the height of the recession, compared to only 22% of the laggards.

#2: Drive new behaviors with KPIs.

Focus on driving “new” behaviors by designating specific metrics and KPIs. Organizations must do things differently and implement new KPIs to push teams forward – I.E. moving in an entirely new direction, or heading down an expected path but in a significantly accelerated way.   Leaders need to also hold themselves accountable to the new behaviors as well by modeling and promoting these newly desired behaviors.

#3: Execute as an agile organization.

Adapt to changing conditions.  Create adaptive strategies, marked with visionary leadership, flexibility and transparency, and planning will help you prevail through uncertainty.

#4: Simplify the strategy.

Develop a clear, easily understandable strategy. The simplicity of the message, the consistent and transparent communication, and a well-understood direction for where your organization needs to go will allow your company to move in unison towards a shared common goal.

Ensure your strategy is clear, it connects with the boardroom’s goals, and to the actions of the frontline as they interact with customers daily. This will occur through multi-year strategic imperatives that will allow your organization to “flex” capabilities depending on conditions.

#5: Articulate a common & shared purpose.

Unite your actions to serve a broader shared purpose.  It is this purpose that will serve as a “north star” to help your organization navigate turbulent times while staying focused on tasks at hand.

Look to the Past to Move Into the Future for Growth and Optimization

Uncertain times test every aspect of an organizations ability to survive.  Now is the time to reinforce your fundamental pillars no matter what difficulties you may face.

For more details on Balancing Growth & Optimization in Today’s Uncertain Times, please see the full article written by our sister company, Clarkston Consulting here.

Regardless of where you are at in your SAP and enterprise systems journey, we want you to know that BCTG is here to help. Whether that be through leveraging our network of technical and functional consultants, or through simply having a human conversation, we welcome the opportunity to become an extension of your team.  Please call us to help you Balance YOUR Growth and Optimization following industry best practices.