Most Executives Admit That Their Corporate Growth Efforts Lead to Waste

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New York — February 22, 2011 — Booz & Company

Paul Leinwand corporate bio page The Essential Advantage: How to Win with a Capabilities-Driven Strategy

Cesare Mainardi corporate bio page

The Essential Advantage

No company can sustain growth without a differentiated approach to adding value for customers — its unique "way to play."

Every company needs to build a well-defined set of capabilities that supports its way to play and ensures growth through sustained competitive advantage.

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A company's top priority should be growth from the core: doubling down on core capabilities and capturing headroom in the market it already serves.

The imperative for extending into new markets is that they must fit the company's capabilities system, or they will be a drag on financial and operational performance.

Successful geographic expansion depends on having capabilities valued by the local market.

  • An effective growth strategy has to start inside the company: Executives can't just look outside the company at where the money is, or where the perceived market opportunity is. Executives have to ask whether the company actually has a right to get it. Do they have the capabilities to win?
  • Good leadership means building a company that's competitively advantaged: "They need to dedicate resources to build up the capabilities that really matter. Because companies with distinctive capabilities will create value — in good times and in bad times," said Leinwand.
  • Leaders must force their organizations to be focused and disciplined: "It's very difficult within a company to commit to a few things that make a difference and then tell everybody else that they're just not integral to the success of the firm over time," said Mainardi. "But that's what has to happen if companies are to gain focus and achieve strong top-line growth."

The Essential Advantage: How to Win with a Capabilities-Driven Strategy