There is a new breed of leaders who can help their organizations achieve sustained, companywide growth. They’re “growth leaders,” and CLOs can lead the charge in identifying and developing them.
The business landscape has changed in ways no one fully understands. Credit remains tight. Confidence is fragile. The vitality of the recovery itself is uncertain. Growth in this new economic reality won’t be about risky marketing plays or highly leveraged megadeals. What companies need now are solid organic growth strategies — ones that make the most of the resources already at their disposal. As chief learning officer, you can help shape such a strategy. You can lead the charge to accelerate organic growth.
Growing a business from within — rather than through mergers, acquisitions or takeovers — is a hallmark of a flourishing enterprise. Of course, even companies that grow through acquisition must consolidate and organically grow their acquired businesses. All companies want strong organic growth, yet as they get bigger, most struggle to sustain it. Why?
Part of the answer is simple mathematics. The larger a company’s existing base of business, the more challenging it becomes to achieve double-digit organic growth. But there is also a significant cultural dimension. Big companies often work in ways that dampen big thinking. Forecasts. Quotas. Budgets. Policies. Procedures. Directives. Standards. The mechanisms that help corporate executives manage large spans of control can unintentionally suppress their company’s innovation and growth initiative.
Impediments to Growth
Two decades of research by Healthy Companies International, a global management consulting firm, has found that within larger companies common impediments to organic growth include:
- Placing too much faith in the power of data: A slavish reliance on data can be self-defeating. Data from the past may be irrelevant for assessing new opportunities.
- Allowing bureaucracy to smother entrepreneurship: In big companies some bureaucracy is necessary, but when it stymies innovation, it kills growth.
- Believing that only big is beautiful: Big companies often put most of their resources behind a few big ideas, while neglecting the cumulative value of many smaller ideas.
- Insisting that all projects be treated equally: Putting every initiative through the same rigorous set of checks and balances kills out-of-the-box thinking.
Intriguingly, some leaders manage to overcome such obstacles, consistently creating rapid organic growth inside large companies. An extensive study conducted by Healthy Companies International in partnership with the University of Virginia’s Darden School of Business profiled a rare breed of leader working inside large organizations — most often as midlevel executives. These “growth leaders” operate much like entrepreneurs, leveraging the company’s existing resources to drive double-digit organic growth. According to researchers Jeanne Liedtka, Robert Rosen and Robert Wiltbank in their book The Catalyst: How You Can Become an Extraordinary Growth Leader, this often entails working around the company’s entrenched bureaucracy, control systems and inflexible work processes.
Where are these growth leaders in your organization? Most likely, they are working their magic far away from the limelight. This group of leaders rarely clamors for attention. In fact, many growth leaders will tell you: “The best thing the company can do for me is to stay out of my way.” While this may sound like old-fashioned rugged individualism, it actually reflects growth leaders’ frustration with systems built on assumptions they don’t share.
Big companies tend to make big bets. And since big bets mean big risks, these organizations understandably want lots of assurance that their bets will pay off. Most, therefore, invest heavily in predictability and control mechanisms such as market research, sophisticated analyses, forecasts, project plans, standard operating procedures and approval systems.
In contrast, the growth leaders we found thriving inside big companies make small bets — lots of small bets. And while they cannot be certain their bets will pay off, it doesn’t worry them. The potential losses are affordable. Growth leaders say: “Let’s try this and see what happens.” They test their ideas on a small scale to start, which makes it easy to pull the plug if an idea doesn’t work. They learn from each experience, modify their ideas accordingly, or move on to experiment with the next innovation. In this way, growth leaders continually innovate in pursuit of organic growth at a low cost, while keeping risks under control.
Just as important, growth leaders are all about what their customers value. By viewing their own operations through the eyes of their customers, growth leaders spy opportunities traditional managers may miss. Many even enroll customers in shaping and carrying out their experiments. When the customer reports that an innovation does in fact add value, the growth leader scales it up. That is their formula for accelerating organic growth.
How Growth Leaders Are Different
The Healthy Companies study revealed that effective growth leaders are different from traditional managers in three fundamental ways:
- They know differently. They have an innate appetite for experimentation and so command fuller and more diverse bases of knowledge, skills and experience.
- They see differently. Growth leaders focus intently on customers and so see growth opportunities that internally focused, control-oriented managers miss.
- They act differently. Growth leaders continually tinker with the value proposition to the customer’s benefit and build high-performing teams that share their own growth mindset.
Build Your Own Growth Leader Factory
What does all this mean for the CLO? In a word: opportunity. In an age when companies compulsively define their key processes, it is ironic that few have an explicit process for driving organic growth. You can apply what research tells us to identify high-potential growth leaders in your company, systematically develop the competencies that research shows ignite organic growth, and then unleash these growth catalysts across your company to build high-performing growth teams and growth organizations.
A case in point is DynCorp International (DI), a government services contractor based in Falls Church, Va. With 30,000 employees, DI has annual revenues in excess of $3 billion. DI teams work in support of U.S. national security and foreign policy objectives around the globe, often in hostile environments. The company erects and maintains military bases in Iraq and Afghanistan, provides security to U.S. diplomats, maintains U.S. military aircraft, trains civilian police forces, supports economic development initiatives, and takes on a wide range of law enforcement and peacekeeping missions worldwide.
When CEO Bill Ballhaus took the helm in 2008, DynCorp International was at a turning point. Revenues were flat, and attempts to reorganize the company hadn’t yielded significant organic growth. Ballhaus recognized the need to inspire innovation and instill an organic growth mindset. With his senior team, he developed a shared vision of how the company would accelerate growth and then customized criteria to nominate candidates from within DI to take part in a program specifically designed to develop high-potential growth leaders. Dianne Walker, DI’s senior vice president of human resources, led the team that shaped the solution.
“Our Growth Catalyst Leadership Development Program is an immersion and mentoring process that identifies and develops entrepreneurial leaders from across the company,” Walker said.
Significantly, the leaders selected to participate in the program were viewed as likely successors to top posts. “Our program is instilling a growth mindset that will endure beyond our current group of top leaders,” Walker said. “This program also gives managers who currently run diverse parts of the company a chance to experience interacting directly together, as a team.”
In weeklong modules conducted quarterly over the course of a year, participants in the program receive classroom instruction specifically designed to develop the growth leadership competencies identified in Healthy Companies’ research and engage in collaborative work sessions with their peers. Early in the program, participants select projects critical to fulfilling the company’s growth vision, with input from the DI senior team. Continued mentoring, coaching and webinars between modules help these growth leaders stay connected with the program objectives while feeling supported in taking appropriate risks. Participants also have online access to a customized tool kit with hundreds of support tools and assessments.
“The venue for each module of the Growth Catalyst Leadership Development Program was chosen to emphasize important characteristics of growth,” Walker said. “Our first session was held close to the company’s headquarters, where the senior team could interact with participants and share their growth vision. The second module took place further off-site to help the growth leaders gel as a team. A later session was held in New York to emphasize the financial implications of growth. A visit to a major customer site helped emphasize that sustained organic growth is driven by what customers want and value.”
DynCorp International’s Growth Catalyst Leadership Development Program is still unfolding, but the impact is already apparent.
“We have definitely seen a shift in mindset,” Walker said. “Sustaining strong organic growth is more of a clear priority across our enterprise, and we see a stronger bias for both innovation and action, which make growth possible.”
Last year, DynCorp International grew at a pace well into the double digits — faster than any of its industry peers. That growth was nearly all organic. The company recently made its first two strategic acquisitions, which are expected to open new channels for organic growth. Looking ahead, DI’s top leaders say that both organic growth and acquisitions will be keys to sustained growth.
A Differentiated Development Investment
Just one-third of the executives responding to a McKinsey study conducted in March believe that their companies’ training programs build capabilities vital to improving business performance. We imagine senior executives often struggle to discern a clear link between customary, generic high-potential leadership development and the company’s measured business success. In contrast, developing your high-potential growth leaders aims to build your company’s capacity to drive top-line growth. That makes the business value unmistakable.
Additionally, tangible growth returns are realized quickly because participants execute growth projects while they are learning growth leadership skills and receiving coaching and mentoring. At the end of one year, high-potential growth leaders can look back not only on a period of tremendous personal development, but also on measured contributions to the organic growth of the business. Along the way, growth leaders become a more cohesive team, ready to work together at the next level and better prepared to mentor and encourage other growth leaders across the company.
In sum, your growth leadership development program can be the catalyst for a sustained, companywide organic growth success story.Filed under: Leadership Development