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4DBC: Is Your Company Fit for Growth?

Is Your Company Fit for Growth?
Is your company fit for growth? Many companies today are not. The way they manage costs and deploy their most strategic resources is preventing the expansion they need. But they don’t realize it — at least not yet. Meanwhile, facing the global economic crisis usually the most critical questions behind the line of each single CEO and business owners who are running medium & large business size, therefore, thinking of answering this question start from the following lines stated in this article.
To be sure, many of those companies are in better financial shape today than they’ve been in for a long time. Having implemented cost-cutting and austerity programs during the recession, they have relatively healthy balance sheets and sizable reserves of working capital. They have strengthened their ability to weather downturns and improved their productivity in ways that could potentially last for years. All these restructuring actions were required for survival between 2008 and 2011
But as they shift their focus from the cost side of the ledger to the revenue side, searching for ways to move beyond cost cutting — entering new markets, commercializing innovative products and services, offering more compelling customer value propositions — these companies are strategically and financially out of shape.
How can you tell if your company is fit for growth? Here is a simple, three-question diagnostic:
• Do you have clear priorities, focused on strategic growth, that drive your investments?
• Do your costs line up with those priorities? In other words, do you deploy your resources toward them efficiently and effectively?
• Is your organization set up to enable you to achieve those priorities?
A successful program to become fit for growth contains three main elements:
• Set clear strategic priorities, and invest in the capabilities that allow you to deliver them.
• Optimize your costs, developing lean and deliberate practices that will deploy your resources more appropriately and efficiently.
• Reorganize for growth, establishing a nimble, well-aligned organization that can execute your new strategic priorities.
These elements reinforce one another; when launched together, they provide the wherewithal for growth, even for companies facing today’s macroeconomic challenges.
To create room for the new priorities, we looked at our historical investments and either limited or eliminated many old systems and processes. We redirected that investment into the new platforms and new capabilities that we needed.
For most companies, cost cutting in a down economy means across-the-board slashing that "spreads the pain" of budget reductions across many departments. While that may sound like the best approach for getting critical results fast and for limiting political infighting, it is a mistake–one that will leave your company weaker, not just smaller.
Instead, companies that need to reduce costs should treat the challenge as an opportunity to identify and reinforce their key capabilities, while divesting from those activities that do not truly reflect the business’s strengths or long-term goals. This more strategic approach will make your company more resilient as tough times continue and more robust as recovery begins.

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