The Physics of Business Growth: Mindsets, System & Processes. Grant Thornton CEO Forum May, 2012. Ed Hess Professor of Business Administration Batten Executive-in-Residence Hesse@darden.virginia.edu www.EDHLTD.com. What Do We Know?. The DNA of HPOs- We know the “secrets”
The Physics of Business Growth: Mindsets, System & Processes
Grant Thornton CEO Forum
Professor of Business Administration
The DNA of HPOs- We know the “secrets”
Growth results from behaviors NOT strategies
Growth results from experimental learning
HPOs build 2 X 2 X 4 X 1 Growth Portfolios
HPOs distance the competition in bad markets and tough times
Great growth companies are great learning companies
The “best” 8 studies:
1982, Peters &Waterman, The Search for Excellence
1994, Collins & Porras, Built to Last
1997, DeGeus, The Living Company
2000, O’Reilly & Pfeffer, Hidden Value
2001, Collins, Good to Great
2003, Joyce, et. al., What Really Works
2007, Hess, The Road to Organic Growth
2009, Simon, Hidden Champions
San Antonio Spurs
Room & Board
The “Not so secret sauce”:
1. Simple focused strategy- an “elevator pitch” business model
2. Structures that enable entrepreneurial behavior- “Small company soul in a large company body”
3. Higher purpose than shareholder value/profit- Money is not enough
4. Culture of relentless constant improvement- the DNA of growth
5. High employee engagement- an implied social contract – an accountable “family”
9 Consistent Findings (cont.)
6. Customer centricity & closeness- Being better is more important than being bigger
7. Humble passionate operators who are values-based leaders- devaluation of elitism
8. Execution & service champions- excellence everyday every way by everyone
9. An Internal aligned consistent self-reinforcing System ( strategy, culture, structure, HR policies, leadership behavior, measurements, rewards, communications) that enables, motivates, and rewards desired behaviors
Darden Growth/Innovation Model
New S Curves
Questions For You? (cont.)
Are you structured to maximize growth behaviors?
Is being better & faster part of every employee’s job and measurements?
Do you- the leaders- spend meaningful time listening to customers and line employees?
Do you have an experimental learning process?
Do you proactively review quarterly your Growth Portfolio?