The Clarion Call : Cultivating Renewal Through Smart Growth

Spring 2004 Issue

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Cultivating Renewal
Through Smart Growth

	Introduction by Bill McKendree, President

On the evolutionary curve of organizational growth, all businesses experience a natural progression that takes them from infancy through high growth and prime, into stability and eventual decline. While over the long term there is no escaping this lifecycle imperative, over the near term some companies find ways to renew themselves and cycle back to high growth. Even during cyclical economic downturns and industry recessions, they consistently deliver better than average results. There are many theories and Good to Great examples that attempt to explain why some companies are better at this than others. At The Clarion Group, we believe the reason lies in the ability of leaders to create a diversified and balanced portfolio of investment and optimization. Through our work with clients, we’ve observed at a very practical level that when leaders align management infrastructure and supporting organizational behaviors with their investment strategies, their companies demonstrate sustainable growth over time. At The Clarion Group, we call this Smart Growth. Taking a cue from nature, it is analogous to the principles of pruning and grafting in order to nurture the fruits of renewal. Achieving Smart Growth is not easy. It requires vision to see the higher possibilities, courage to make difficult decisions, and commitment to stay the course. As with all the concepts developed at The Clarion Group, Smart Growth is the product of collaboration among several of our team members. Jon Wheeler, Wendy Brown Helmkamp, and Lyne Desormeaux contributed to create this issue of The Clarion Call. We hope our insights broaden your understanding of the opportunities that exist for Smart Growth within your own organization. As always, we welcome your feedback.

Pruning for Optimization, Grafting for Growth

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In 2001, a new entry on the business best seller list marked the beginning of a turning point in executive awareness. The book, Good to Great by Jim Collins, challenged preconceived notions about management strategy and what it means to be successful. It offered detailed research and analysis in examining why some companies achieve long-term success while others seemingly lack the capacity to demonstrate sustainable results over time.

Released during a period of substantial economic shifts and volatile world events, the success of Good to Great was due in large part to an inherent receptivity of executives. Economic realities necessitated that businesses achieve the highest possible levels of efficiency. At the same time, leaders at every level were questioning the purpose of their organizations and searching for deeper meaning.

With a disciplined approach, executives pruned and shaped their organizations to eliminate waste and streamline processes. Today, businesses in every category are operating at the leanest levels.

For some companies, however, optimization has come at a steep cost. By focusing almost entirely on operations efficiency, many lost sight of the need for continued investment in growth strategies. As a result, once thriving organizations are merely surviving. And while survival can be seen as a measure of success, forward-thinking leaders recognize the need to continually nurture and invest in renewal in order to maintain growth.

A Diversified Growth Portfolio

At The Clarion Group, we believe business growth is organic. Business lifecycles follow a natural progression from infancy through high growth and a peak of prime, through stability and into a gradual decline.

Business lifecycles follow a natural progression from infancy through high growth and a peak of prime, through stability and into a gradual decline.

In our work with clients, we have seen organizations at every stage of this evolutionary curve from young emerging entities to mature corporate institutions. Regardless of where they are, however, we have found that all organizations face similar challenges when it comes to balancing optimization with investment.

For executives of large enterprises, we have observed that achieving sustainable growth over time is like managing and nurturing a diversified investment portfolio. It requires the same clear investment strategy and appropriately balanced optimization and investment approach.

At the same time, each portfolio entity must define and apply a unique Operating Model of business strategy, management infrastructure, and organizational behavior (The Clarion Call Autumn 1999).

At The Clarion Group, we refer to this managed portfolio approach as Smart Growth.

Today, there are encouraging signs of recovery with positive economic indicators and a rising stock market. The time is right for executives to recommit to exploring and investing in Smart Growth. The challenge for leadership is to build and align their growth portfolio strategies with the resources and talent needed to execute, to trust their instincts, and to act. In this issue of The Clarion Call, we would like to offer three examples of Smart Growth from our work with clients. The scenarios depict organizations at three different stages in their business lifecycle. While each company’s approach to Smart Growth is distinctly different and their Operating Models are unique, they all demonstrate what’s possible when leaders display the courage, vision, and commitment of Smart Growth.

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