What Is Organic Growth?

Organic growth refers to the sales revenue and profit obtained by the company by relying on existing resources and businesses, by improving product quality, sales and service levels, expanding customers and expanding market share, promoting innovation and improving production efficiency. Natural growth.

Organic growth

Right!

Organic growth refers to the sales revenue and profit obtained by the company by relying on existing resources and businesses, by improving product quality, sales and service levels, expanding customers and expanding market share, promoting innovation and improving production efficiency. Natural growth.

Organic growth refers to the growth of customer satisfaction, employee engagement, and core business profitability. It is the growth brought by the company's core business expansion, including innovation, new products and services, and customer growth. Organic growth is a concept that corresponds to nonorganic growth. It excludes mergers and acquisitions,

So what role should company leaders play in organic growth? Through research on dozens of companies, we learned that CEOs at the center of the company have a significant impact on the degree and effectiveness of organic growth in various departments. We have summarized 4 principles of organic growth for company leaders to adopt, thus starting the engine of organic growth within the company.

Always keep the company in mind

These are three things a company's CEO and other leaders can do to keep the entire company in mind.

Setting operational standards. If the task of organic growth is given to the production line, then they will be biased towards projects that they feel they can do, rather than those that give the company the greatest opportunity. The best way to deal with this phenomenon is to promote the set of operating standards by the company's core leaders to make the scale and source of growth opportunities transparent.

Make sure the data is accurate. The core of the company leadership should have a database of organic growth opportunities across the enterprise, including data from various departments as well as data across departments. This data can help companies understand where resources should be invested to make the most of them.

Build growth capabilities across the company. Just as the company's core has merger and acquisition capabilities, it can also have organic growth capabilities. And building these capabilities is essential. For example, a company in the Midwestern United States, Manitowoc, whose business includes lifting cranes and the commercial equipment required by the catering industry, has the best growth opportunities for both businesses in emerging markets, where local experts It is important but lacks management skills. CEO Granterock has ordered that emerging market experts are critical to all company functions, a move that has given these two businesses the ability to be difficult to obtain on their own.

Out of business cycle

This is a common problem for most listed companies: invest heavily in growth during a business downturn; and focus only on the rate of return during a business downturn. However, this method magnifies the business cycle, and company leaders may cause great harm to the organic growth efforts of various operating departments.

Breaking through the ills of the business cycle requires perseverance. In a downturn, no one wants to hear the argument that expanding investment can achieve growth, and no one wants to hear growth gradually in the peak season. Being able to withstand the temptations and influences of the business cycle is a necessary task that the company's CEO must assume, and it is also a touchstone for testing decision-making capabilities.

Resistance modelling

Management likes modelling because they make complex management easy. Therefore, we often hear that a department called the "growth engine" has received a large amount of investment funds, while other departments called "money cashers" have funded the "growth engine". The problem with this is that modelling affects people's perceptions of growth, affects the behavior of various departments, and ultimately fumbles.

Any business can create new services for existing customers or find new customers for their existing businesses. In addition, if management gives up organic growth, they will not do their best to seek innovation, and it is this innovation that can make the company invincible in the competition.

It is equally dangerous to model a sector as a "growth engine." If a department manager feels that they are solely responsible for the organic growth of the entire company, they will not take unnecessary risks to invest or spend.

Creating effective communication mechanisms for organic growth

Having a neat and concise communication mechanism can make the pursuit of organic growth produce greater synergy. If a company can take the time to create an effective communication mechanism and express it through clear sentences, the possibility of confusion will be greatly reduced. Company leaders are the most suitable candidates because their responsibility is to spread ideas throughout the enterprise.

Clear language prevents companies from confusing goals and means, which is one of the pitfalls managers often encounter. We will find that in many companies, people often use the word "opportunity" to refer to an action, such as adding sales staff or building a new factory. Although such actions may present opportunities for companies, they are not opportunities in themselves. If it is considered as an opportunity, it is likely that managers will ignore the real opportunity in front of them.

A successful business model does not necessarily lead to organic growth, and any company can become better at organic growth under the existing business model. But this requires company leaders to act proactively and be involved. CEOs and other senior managers do not need to take drastic measures for this. All they need to do is help departments pay attention to the overall situation, take the lead in jumping out of the business cycle, resist modelization, and create effective communication mechanisms for organic growth. As long as you follow these 4 principles, you can transform the development engine within your company.