Who isn’t looking for growth? It’s easy to target and hard to achieve. In fact, the average company grew just 2.8% in 10 years preceding the COVID-bubble and the top organic growers grew 6%. (Per the data, it takes an acquisition to really boost growth into double digits.)
McKinsey & Company published a list of 10 items it takes to generate value and growth in today’s markets. No company can truly focus on all 10, so here’s the three that I believe really make a difference for leading chemical companies today:
- Put competitive advantage first.
Competitive advantage has been a favorite of strategists… forever. The critical difference today is broadening of what competitive advantage really means to you and your business partners. Competitive advantage has often been thought of as a product or asset advantage.
Competitive advantage today is about the experience – what those products and assets, in combination with people and processes can deliver. Today’s leading companies recognize that end- to-end customer experience is a critical competitive advantage and source of true differentiation.
- Make the trend your friend… and find a buddy.
Identifying and taking advantage of trends in fast-growing markets is a growth advantage. Let’s be honest, many traditional chemical companies have been pretty…. slow, myopic, risk-averse … to trends. There are good reasons for that – cost to develop suitable products and services, asset-intensity, risk, etc.
Others are totally focused on new, innovation technologies and services to meet trends and future needs – sustainability, green chemistry, digitization – all come to mind.
Today, successful growth-oriented chemical companies know that pivoting a portion of their business to respond quickly to trends and needs is critical. AND finding partners to work with – accelerates their success and balances risks and investment.
- Shrink to grow.
Prune your existing portfolio to enable stronger growth. Whether this is “cutting the tail” of customers or products or carving out businesses that just don’t fit anymore. Gardeners everywhere know that judicious pruning makes a plant or tree stronger and more fruitful. So too with companies. Pruning running back the outliers, in order to strengthen and grow (organically and via acquisition) is an essential business tool.
Want to talk growth? Reach out to set up a call.