Summary.
After a decade of downsizing and increasingly intense competition, profitable growth is a tremendous challenge many companies face. Why do some companies achieve sustained high growth in both revenues and profits? In a five-year study of high-growth companies and their less successful competitors, we found that the answer lay in the way each group approached strategy. The difference in approach was not a matter of managers choosing one analytical tool or planning model over another. The difference was in the companies’ fundamental, implicit assumptions about strategy. The less successful companies took a conventional approach: Their strategic thinking was dominated by the idea of staying ahead of the competition. In stark contrast, the high-growth companies paid little attention to matching or beating their rivals. Instead, they sought to make their competitors irrelevant through a strategic logic we call value innovation.