Picking the Right Projects is Key to Fast Growth
The McKinsey Quarterly is good for saying the obvious:
Why do many companies competing in supposedly high-growth sectors fare so poorly? Bad execution is one obvious possibility, but McKinsey research into the recent growth histories of more than 200 large corporations around the world shows that while the ability to execute is essential, it isn’t the key differentiator between companies that are growing quickly and slowly. The most critical thing is to compete not only in a fast-growing sector but also—at a more granular level—in a fast-growing part of that sector. Gaining new revenues through M&A is important as well. Market share, the third main growth driver, is less significant. Executives should assess a company’s performance on all three, for all are actionable, and the more of them companies excel in, the greater the rewards.
In other words, DO THE RIGHT PROJECT! I think it would be more accurate to say that companies have a problem because they are working on the wrong projects- all this consulting talk (”granular level”, etc.) just confuses the issue. The one about “market share” being less significant than picking the right fast-growing sector and the right acquisition is also painfully obvious.
What do you think? Are McKinsey research projects that unearth these types of “revelations” worth the time to read them?
Don’t miss a post! Subscribe via EMAIL.
Image Source: stockxchng.com
Absolutely right Bob.
Choosing the right project is key…but many organizations don’t know how to do that. Plus..they spend millions with companies like McKinsey to find out that they don’t know how to pick the right projects :)
Eric- right! and they do not have to spend millions with McKinsey types. The reticence that companies have in attacking how to set up governance/PMO models to solve this problem is very interesting. I think it stems largely from hesitance to introduce another layer or structure into the organization; it must be done correctly in order to avoid a backlash and failure. I’m not saying it’s easy. But think of the opportunities!