Understanding growthSeptember 20th 2013 – Montreal

McKinsey & Company | 2

Organizations have a limited natural life span

Impact

Time

Startup

Growth

Maturity

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Healthy organizations renew across three horizons

Horizon 1Extend and improve core activities

Horizon 2Build emerging opportunities

Create viable options for the future

Horizon 3

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How healthy are your horizons?

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Horizon 3:▪ Leadership dedicating real time to new

opportunities?▪ New ideas markedly different than last year’s list?▪ Ideas started in concrete, measurable first steps?

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Horizon 2:▪ Initiatives that could become as big as current core?▪ Initiatives gaining momentum?▪ Attracting talent?

Horizon 1:

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▪ Delivering against mission?▪ Sustainable cost structure?▪ Stable or growing revenue?▪ Reasonably safe from external shocks?

McKinsey & Company | 5

Six unhealthy (but common) patterns

Under siege

Running out of steam

Losing the right to grow

Ideas but not building business

Failing to seed for the future

Inventing a new future

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Overcoming inertia

Earn the right to grow

▪ Achieve operational excellence▪ Cut out distracting/low potential activity▪ Build confidence of stakeholders

Build the resolve to grow

▪ Gain senior team commitment▪ Set higher aspirations▪ Remove organizational barriers

Search for new opportunities

▪ Create expansive mindset by redefining who you serve and how

▪ Explore “seven ways to grow”

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Building momentum

Staircases to growth

▪ Build new ventures in small measured steps

▪ Assemble or acquire new capabilities with each step

Active adaptation

▪ Adapt the organization model as new ventures are launched and rolled out

Cocooning▪ Protect and nurture emerging new

ventures

McKinsey & Company | 8

Organization capabilities

Existingcapabilities New

capabilities Required futurecapabilities

Aspiration

Staircases to growth

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One key is identifying your growth talent

Horizon 3

Horizon 2Horizon 1

Operators (Horizon 1)▪ Analyze, plan, control▪ Minimize risk▪ Focused on current operations▪ Think linearly▪ Inside-out; product-based▪ Determine why things won’t work▪ Sustain current position

Growers (Horizon 2 & Horizon 3)▪ Do it, try it, fix it - experiment▪ Take risks▪ Create a whole new budget▪ Think laterally▪ Outside-in; market-based▪ Understand how to make it work▪ Sustain growth