0904 Plotting Your Course Along the Growth Excellence Matrix

Chairman’s Series on GrowthInvesting in Your Company’s Growth Potential:

Plotting Your Course Along the Growth Excellence Matrix

Presented by

Craig Baty

Global VP, IT Practice,

Sydney, Australia

Frost & Sullivan

21 April 2009

2

Agenda

1. Overview: Where We Are in the Series

2. Why Measure the Future Growth Potential?

3. Introduction to the Growth Excellence Matrix (GEM)

4. Key Applications

5. Validating the Model

6. Competitive Benchmarking

7. Serious About Growth: Next Steps

3

Polling Responses from March APAC/J CSG

W hich o n e o f th e follo w ing to o ls is you r co m p an y us in g to d rive g ro w th?

Strategic Planning

33.3%

N ew Product D ev elopm ent

66.6%

C om peti tive Posi tioning and Branding

33.3%

Sales Optim ization

66.6%

D is tribution C hannel Optim ization

66.6%

Is M &A a cu rren t co mp o nen t o r fo cu s in yo ur grow th s tra teg y?

Yes

100.0%

N o

0.0%

Do you feel that you have as sophisticated an approach to M &A as you would ideally like to have?

Yes

0.0%

No

100.0%

4

The Growth Acceleration System

5

Introduction to Growth Excellence Matrix (GEM):Ford in Hybrid SUV market

Growth Excellence Matrix

Honda

Toyota

Chevrolet

Hyundai

Dodge

Nissan

Ford

0

5

10

0 5 10

Implementation Excellence

Gro

wth

Str

ate

gy

Ex

ce

lle

nc

e

Growth Strategy Factors:

Ford is losing global market share year after year

Toyota and Honda have most potential to gain / grow market share in Hybrid market

Ford is early adopter of technology trends, but suffers with high cost to manufacture

Toyota first to market with affordable, mass production hybrid

Ford does not try to compete with other auto-makers by “best in class” practices, they focus on consumer perspective with investments in end-user data instead of market trends

Implementation Excellence Factors:

Ford has invested in costly, high-profile marketing campaigns that do not translate to consumer sales

Ford has high brand cache in APAC markets as luxury vehicles

No unified growth strategy, they are trying several diverse strategies at once and hoping one will work

6

Growth Strategy Excellence Factors

1. Benchmarking Growth: Industry and Company

2. Culture of Growth, Innovation and Leadership

3. Vision Alignment between Leadership and Staff

4. CEO’s 360 Degree Perspective is Leveraged

5. All 10 Growth Processes are Leveraged

6. Growth Pipeline System

7. Growth Strategies are Evaluated through All Research Methodologies

8. Key Growth Careers (CEO’s Growth Team) are Leveraged

9. TEAM Research Leveraged to Generate Ideas

10. Leadership Focused on Growth

** Each factor is scored on a scale of 1-10 (10 is high)

7

Implementation Excellence Factors

1. Best Practices in Sales & Marketing

2. Best Practices in Research & Development

3. Best Practices in Key Support Departments

4. Best Practices in Leadership

5. Best Practices in Finance

6. Vision Implementation Alignment

7. Best Practices in Project & Business Planning

8. Training on Best Practices

9. Culture of Growth, Innovation and Leadership

10. Best Practices in Implementing the 10 Growth Processes

** Each factor is scored on a scale of 1-10 (10 is high)

8

The Growth Excellence Matrix: Growth Strategy vs. Growth Strategy Implementation

Current position based

on Strategy &

Implementation

Growth Excellence Matrix

GEDell

Ford

United Airlines

Home Depot

VC Startup

Client

Starbucks

AppleNetflix

AT&T

Hyundai

Mercedes

McKinsey

Bank of America

0

5

10

0 5 10


Gro

wth

Str

ate

gy E

xcell

en

ce

9

Growth Excellence Matrix: 4 Key Applications

• Competitive Benchmarking Future Growth Potential

• Merger & Acquisition

• Growth Investing

• Vision Alignment

10

Developing a Valid and ReplicableGrowth Measurement System

• Provide support to highlight and enhance GEM as a powerful

benchmarking tool.

• Enhance the ability of GEM as a diagnostic tool and as a prescriptive

tool.

• To validate GEM as a predictive tool, providing evidence that it

positively impacts company growth and performance.

11

Growth Strategy Excellence

The Dynamics of Growth Strategy Excellence, Implementation Excellence, and Growth

Growth


The effectiveness of growth

strategies on growth depends

on the level of implementation

excellence.

12

High growth companies generally have higher index scores across

all the growth strategy excellence attributes

0%

20%

40%

60%

80%

100%

Glo

bal P

ersp

ectiv

e of S

trat

egy

Synth

esis

of T

echnolo

gy P

ersp

ectiv

e

Bes

t Pra

ctic

es P

ersp

ectiv

e

Res

earc

h Supp

ort T

EAM

Inte

grat

ed U

nderst

andin

g of I

ndust

ry

Gro

wth

Sys

tem

or G

row

th P

ipel

ine

Visio

nary L

eaders

hipG

row

th W

orksh

op

Low Growth Ave Growth High Growth

Ind

ex

Sc

ore

13

High growth companies generally have higher index scores across

all the implementation excellence attributes

0

0.2

0.4

0.6

0.8

1

Team

Cons

ensus

on Str

ateg

y

Bes

t Pra

ctic

es fo

r M

arke

ting

Bes

t Pra

ctic

es fo

r Sal

es

Bes

t Pra

ctic

es fo

r M

anag

emen

tSen

se o

f Urg

ency

Focused

Tra

inin

g on B

est P

ract

ices

Man

agem

ent o

f Chan

geG

row

th E

nviro

nment

Low Growth Ave Growth High Growth

Ind

ex

Sc

ore

14

Growth System or Growth Pipeline

The impact of growth strategies varies across levels of implementation excellence

Best Practices Perspective

Strategies that significantly drive growth

IMPLEMENTATION EXCELLENCE

Low Average High

Global Perspective of Strategy

Low implementation excellence companies:

• are more vulnerable to intensity of competition

• have potential for growth via technology turbulence

High implementation excellence companies:

• grow with a global perspective of strategy

• are impacted by new market and new product strategic orientation

Average implementation excellence companies:

• are affected considerably by strategies focusing on best practices strategies or those pertaining to operational excellence

Imp

ac

t o

n G

row

th

Lo

w

Hig

h

15

High growth companies generally have higher index scores across all the performance metrics

0%

20%

40%

60%

80%

100%

Growth vs. Industry Growth vs.Top

Competitor

Performance-

Financial

Performance -

Quality

Low Growth Average Growth High Growth

Ind

ex

Sc

ore

16

Sample Mapping on the GEM Matrix

Cisco

GE Security

Honeywell

US Postal

Service

Agfa Health

Corporation

Standard

Microsystems

Gro

wth

Str

ate

gy E

xcellen

ce


High flyersGliders

UnderachieversStrugglers

GEM

Florida

Public Utilities

17

Quadrant Differentiators

Strugglers

GEM

Strugglers are unable to

formulate and implement

any growth strategy.



GEM

Underachievers have the

discipline to implement,

but lack strategy.

Underachievers



GEM

Gliders soar only if the

wind allows, but lack the

engine to sustain flight.

Gliders



GEM

High flyers soar at will,

backed-up by a jet engine.

High Flyers



18

GEMGEMGEMGEMGEMGEM

Implications of GEM

• Sound framework

• Evidence-based

• Diagnostic capability

• Prescriptive capability

• Predictive capability

Focuses an organization

on the steps that lead to

growth

Represents a frontier

capability for speedy,

quantitative-based

measurement

Compresses the

awareness to action

cycle

19

Global Automation and Process Control Markets:Evaluation of Market Participants Based on GEM (2007), World

Revenue growth rate of Emerson for the year 2006

is 16.0%

During the period of 2004 to 2006, the company

introduced more than 500 major products, which

is a huge increase over any preceding period for

Emerson

The contract to upgrade three refineries of British Petroleum

(BP) is a key win for Emerson in 2006

Emerson acquired Artesyn Technologies, Knurr

AG, Bristol Babcock to serve diversified market.

Source: Emerson Process Mangement

Siemens

Schneider

Yokogawa

Emerson

ABB

Invensys

Honeywell

Rockwell

0

5

10

0 5 10

Gro

wth

Str

ate

gy E

xcellen

ce


20

Global Automation & Process Control Markets: Evaluation of Market Participants Based on GEM (2008), World

Schneider

Yokogawa

Emerson

ABB

Invensys

Honeywell

Siemens

Rockwell

0

5

10

0 5 10

Key wins as Major Automation Contractor in

China & the Middle East drive the growth for

Emerson

Over the last 18 months, the company has been selected to install its PlantWeb® digital plant architecture with the

Ovation® expert control system at 12 new U.S. coal-fired units

Acquisition of Data Management Inc, Damcos

Holding, The Automation Group

Emerson and Cisco have combined their

expertise and technology to deliver a complete

open standard solution for wireless process

and plant management applications

Gro

wth

Str

ate

gy E

xcellen

ce


Emerson’s launch of SmartWireless – based

on wireless Hart protocol for plant wide area

application, with 99% data reliability.

21

Global Automation and Process Control Markets: Evaluation of Market Participants Based on GEM (2008), World

Growth Strategy Excellence Emerson

ABB

Rockwell

Honeywell

Siemens

Schneider

Yokogawa

Invensys

1.Growth Compared to Competition and Industry Average

2.Visionary Integration of Technology,Markets, Economics

3. Strategic Partnering Optimization

4. Industry Breadth Perspective

5. Best Practice Perspective

6.Team Research Methodology & Evaluation

7. CEO’s Growth Team Utilization with GrowthWorkshops

8. Comprehensive Growth Pipeline System

Implementation Strategy Excellence1.Team Consensus on Growth Strategy

2. Best Practices in Marketing

3. Best Practices in Sales & Sales Management

4. Best Practices in Leadership Change

5. Best Practices in Strategic Partnering

6.Technology Integration & Adoption Skills

7.Growth Training: Collaboration & Best Practices

8.The GIL Culture: Growth, Innovation and Leadership

9. Best Practices in R&D and Product Management

10.Global Teamwork on Growth Strategy Plan

1-5

6-7

8-10

22

Global Automation & Process Control Markets: Comparative Evaluation of Market Participants Based on GEM (2007 and 2008), World

Position in 2007 Position in 2008

Even though ABB had a phenomenal year in 2007,

changes in the leadership and lack of focus on the

implementation strategy were a drag on its position in

2008

Siemens is and has continued to implement better

growth strategies and best practices despite senior

management realignment

For Rockwell, position has declined from 2007 to

2008 but the prospects for future trend are very high

due to enhanced product portfolio through

acquisitions

Yokogawa is continuously losing its overall

position with a weak balance sheet and modest

forecast

Schneider continues to improve its position year

over year, and has strengthened its position in its

strongest vertical-power generation, transmission

and distribution

Invensys’s future trend is looking slightly

downward due to low order book and its cyclical

effect in rail division

Gro

wth

Str

ate

gy E

xcellen

ce

Yokogaw a

Emerson

ABB

Honeyw ell

Siemens

0

5

10

0 5 10Implementation Excellence

Schneider

RockwellInvensys

23

Comparison 2007 & 2008 (contd.)

Honeywell

Honeywell Velocity Product Development™ has been

deployed throughout their businesses, reducing cycle

times and accelerating release of more than 300 new

products in 2007, up 46% from 2006.

For Honeywell, the scope of Integrated Main

Automation Contractor projects increased by 20% at

new and existing facilities across a number of industries,

including oil & gas, power, and life sciences.

Siemens

Siemens’s Product Life-cycle Management product

portfolio, along with SIProcess, enhances its position

as total solution provider.

ABB

ABB had a growth rate of over 18% in comparison to

2007 owing to its wins in power industry. The strength

of its products in power generation and transmission,

along with increased orders from North America, aided

its growth.

Yokogawa

Yokogawa’s continuous fall in share holder value,

despite better top line growth in local currencies, is

because of the intense price pressures in Asia and

willingness to take projects in the US at lower margins.

Rockwell Automation

Rockwell Automation is trying to reverse its decline by

strengthening its product offerings through acquisition

of Incuity, ICS Triplex, and Pavilion Technologies. It has

fallen slightly due to slowdown in North America, its

largest market.

24

CEO / CSO Response to GEM Analysis

“The GEM matrix has reduced

lots of factors into a useful

clean and simple picture.”Peter Zornio

Chief Strategy Officer

Emerson Process Management

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www.frost.com/gilglobalGIL GLOBAL 2009A global community focused on Growth, Innovation and Leadership

October 2009

Kuala Lumpur

October 2009

Shanghai

December 2009

Sao Paulo

February 2010

Tel Aviv

May 2009

London

September 2009

San Francisco

October 2009

Middle East

October 2009

India

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Next Steps

� Request a proposal for Growth Partnership Services to support you and your team to

accelerate the growth of your company.

� Attend Frost & Sullivan Executive MindXchange best practice networking events

(http://www.frost.com/cal) to share and address strategic challenges

� Consider Conducting a 360 Degree Growth Workshop to support your long-term growth

strategy

� Join us at a Growth, Innovation and Leadership 2009: A Frost & Sullivan Global Congress

on Corporate Growth (www.frost.com/gilglobal)

� Register for the next Chairman’s Series on Growth: (http://www.frost.com/growthapac)

� Schedule a Recession Strategy Session with a Frost & Sullivan Industry consultant (email

us: [email protected])

� Schedule a One-on-One Growth Strategy Dialogue with a Frost & Sullivan Growth

Consultant (email us: [email protected])

� Register for Frost & Sullivan’s Growth Opportunity Newsletter and Growth Team

Membership e Bulletin to keep abreast of growth opportunities in your industry and best

practices in your career track. (www.frost.com)

27

Contact Us

If you have questions or would like further information about anything we discussed, please send your query to the email provided below and we will get back to you shortly.

Alvin Chua

Account Manager

Automotive, Transportation & Logistics

DID: +65 6890 0997

Mob: +65 9199 4566

eMail: [email protected]

Documents

0904 Plotting Your Course Along the Growth Excellence Matrix