Ranjay Gulati

Businesspeople across a wide range of industries have increasingly begun to identify maturation and commoditization as emerging challenges. Whether because of globalization, maturing technologies, ease of imitation, decreasing barriers to entry, open standards in technology markets, or pressures from customers who are themselves being squeezed, more and more companies are feeling the intensity of price competition, leading many to describe their businesses as commodity markets. It’s one thing if you have an inherent cost advantage, like Dell or Wal-Mart. But most companies don’t, and for them, commoditization is a deadly game. When you’re constantly scrambling to make your margins, you have to strain to think about the top line. Everyone wants to find ways to grow, but real power lies in doing so profitably—and that takes serious work.

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Reprint: R0407K 

When does it make sense for companies to grow from within? When is it better to gain new capabilities or access to markets by merging with or acquiring other companies? When should you sacrifice the bottom line in order to nurture the top line?
In a thought-provoking series of essays, five executives&#8212;Kenneth Freeman of Quest Diagnostics, George Nolen of Siemens USA, John Tyson of Tyson Foods, Kenneth Lewis of Bank of America, and Robert Greifeld of Nasdaq&#8212;describe how they have approached top-line growth in various leadership roles throughout their careers. They write candidly about their struggles and successes along the way, relaying growth strategies as diverse as the companies and industries they represent.
The leaders&#8217; different tactics have almost everything to do with their companies&#8217; particular strengths, weaknesses, and needs. Freeman, for instance, emphasizes the importance of knowing when to put on the brakes. When he first became CEO of Quest, he froze acquisitions for a few years so the company could focus on internal processes and &#8220;earn the right to grow.&#8221; But for Greifeld, it&#8217;s all about innovation, which &#8220;shakes up competitive stasis and propels even mature businesses forward.&#8221;
The executives agree, though, that companies can grow (and can do so profitably) by distinguishing their offerings from those of other organizations. As Ranjay Gulati of Northwestern&#8217;s Kellogg School of Management points out in his introduction to the essays, no matter what strategies are in play, &#8220;it&#8217;s important to remember that growth comes in many forms and takes patience.&#8230;The key is to be ready to act on whatever types of opportunities arise.&#8221;

How CEOs Manage Growth Agendas

Reprint: R0407K When does it make sense for companies to grow from within? When is it better to gain new capabilities or access to markets by merging with or acquiring other companies? When should you sacrifice the bottom line in order to nurture the top line? In a thought-provoking series of essays, five executives—Kenneth Freeman of Quest Diagnostics, George Nolen of Siemens USA, John Tyson of Tyson Foods, Kenneth Lewis of Bank of America, and Robert Greifeld of Nasdaq—describe how they have approached top-line growth in various leadership roles throughout their careers. They write candidly about their struggles and successes along the way, relaying growth strategies as diverse as the companies and industries they represent. The leaders’ different tactics have almost everything to do with their companies’ particular strengths, weaknesses, and needs. Freeman, for instance, emphasizes the importance of knowing when to put on the brakes. When he first became CEO of Quest, he froze acquisitions for a few years so the company could focus on internal processes and “earn the right to grow.” But for Greifeld, it’s all about innovation, which “shakes up competitive stasis and propels even mature businesses forward.” The executives agree, though, that companies can grow (and can do so profitably) by distinguishing their offerings from those of other organizations. As Ranjay Gulati of Northwestern’s Kellogg School of Management points out in his introduction to the essays, no matter what strategies are in play, “it’s important to remember that growth comes in many forms and takes patience.…The key is to be ready to act on whatever types of opportunities arise.”

How CEOs Manage Growth Agendas

Summary.

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