Monday, December 31, 2007

Deciphering The Alchemy of Growth

Why some companies grow & some companies flounder? Why some companies remain the darling of stakeholders alike year after year whereas in the same breathe we find some companies who become untouchables after remaining the golden egg laying goose for quite some time ? Why do some companies come and go while others endure?

Growth is really an ambiguous term to decipher(ask any CEO) which have compelled so many business gurus and analysts to write so many volumes that it looks superfluous to have another volume. But when one comes out of McKinsey stable,don't take it lightly that it will be like all the other books which promises much but fail to deliver on their tall promises in terms of their content.

Here comes the title “The Alchemy of Growth” wherein McKinsey & Company, Inc. consultants Mehrdad Baghai, Stephen Coley, and David White have tried to simplify the secret to the lasting growth of an enterprise. In this pleasantly simplified book, the authors offer a practical guide for jump starting expansion and keeping it going. "Growth is a noble pursuit. It creates new jobs for the community and wealth for shareholders. It can turn ordinary companies into stimulating environments where employees find a sense of purpose in their work," they write. "Growth's transformative power is akin to the alchemy of old."

The authors describe the approaches that have succeeded in helping their corporate clients around the world to step up the pace. For instance, companies must simultaneously focus on "three horizons" critical to growth. The first is the current businesses of the firm wherein the firm have already demonstrated it's core competencies; the second, the fast-developing entrepreneurial ventures which the firm believes that there is a strong future; and the third, the ideas that will germinate into tomorrow's profits which may not have a strong visibility as of today or three to five years down the line. These three horizons reflect the company's present, short-term future, and long-term future. One must be able to manage these three horizons effectively by:
· defending and growing core businesses
· building up new core businesses for the future
· planting the seeds that may become potential businesses for the long term.

The power of this book lies in it's simplicity yet powerful description of the ways to be a venture which grows year after year. It cites real life examples like NOKIA,Disney and some other companies which have made growing as a habit and some companies which have turned around to be profitable.

Though one example like ENRON may not be the company someone would like to see among these ventures,but so are many books which wrote rims and rims about the company's glorious growth period not withstanding it's doubtful accounting practices

If you want a book full of business jargons then this book may not be for you, otherwise this is a lighter read which is highly recommended. Can be used as an instructive handbook for managers interested in spurring their companies to new heights of growth.

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