Chart a course for profitable growth and avoid the Growth ParadoxSM. Economies of density are what matter today—ensure your revenue grows faster than complexity.
How and where to grow are the key questions posed by growth strategy. Yet evidence shows many companies struggle to find answers in today’s age of complexity.
Nearly half of companies in the S&P 500 become less profitable as they grow—eroding scale, and ultimately impeding their ability to grow.
As we describe in our recent book Growth in the Age of Complexity, reliance on traditional strategies can leave companies exposed. They need new tools, mindsets, and strategies to achieve profitable growth.
We have found that companies’ growth plans today overlook, or are oblivious to, key dynamics central to successful strategy in the Age of ComplexitySM.
The Growth ParadoxSM
Many actions companies take in a bid to drive growth fundamentally impede their ability to grow. For example, a company proliferates its product line to drive sales, but the resulting complexity yields poor service levels, unhappy customers, and ultimately, lower growth.
The Sirens of Growth®
These are growth traps—the Expanding Portfolio, the Greener Pasture, the Smash Hit, the Castle Walls—each with a corresponding detrimental mental model that can lurk at the center of your strategy and lead you astray. We dive deep into each of these growth traps in our book, Growth in the Age of Complexity.
Economies of Density
If we are pursuing traditional ’economies of scale’, we may be tempted to believe all revenue is good revenue. But in fact, ’economies of density’ are a better proxy for profitability, with complexity being the denominator.
No more Ivory Tower
Traditionally, strategy-setting is an annual, center-led exercise. However, life cycles are accelerating, and in a complex world it is increasingly hard to pick winners from the Ivory Tower. Localized experimentation, adaptive strategies, and organizational agility must replace the traditional ivory tower approach.
Acquisitions can be a powerful driver of growth. They can help you leapfrog to a growth destination when organic growth will take too long. Yet failure to understand complexity, and its devastating impact, leads to problems around valuation, risk management, and integration. For example, in M&A valuations, many companies approach forecasting overhead expense as a percent of revenue—this approach is imprecise, as overhead is frequently driven by complexity. The result? An overestimation of overhead synergy targets or missing out on a rich area for value-enhancement.
Let Wilson Perumal & Company guide you to profitable growth. Leveraging tools and frameworks featured in the
bestselling book Growth in the Age of Complexity, we support clients with:
Strategy Design
Strategy design that is anchored in the reality of a company’s starting point and which includes the necessary implementation and resourcing plans.
Current Strategy Health-check
Our strategy health-check will reveal whether your current strategy is on course for profits and sustained revenue growth and reveal any Sirens of GrowthSM that may be lurking in your business. We conduct a health-check on your current strategy.
Market Assessment
In a world with abundant adjacency opportunities, which are superior? We help test and size potential markets, as well as identify the operational requirements to succeed.
Acquisition Support
We help companies with due diligence, providing our unique view through the lens of complexity, as well post-merger integration, ensuring it goes deep enough to maximize synergies.
A media organization with a strong brand, a diversified portfolio of holdings, and access to capital was struggling in the face of tough industry headwinds. WP&C helped them identify how and where to grow, achieving the following results:
Don't settle for incremental innovation! Flipping the switch on innovation requires vision, strategy, execution and a correctly wired organization. Understanding your company’s innovation challenges starts with recognizing symptoms and root causes and making room in your portfolio. Learn how to define a clear vision, develop a winning strategy, and establish an effective process that enables innovation to drive growth.
At WP&C, we have found that taking a step back to identify and fix misalignment can be a strategic way to unlock value for management teams. Learn about powerful business transformation outcomes we've produced in three case studies explored in this article.
As companies seek to drive growth, they are often overwhelmed by complexity resulting from product proliferation. Portfolio complexity can quickly lead to decreased margins while also typing up valuable capital. When done right, portfolio optimization drives significant cost and growth benefits.
“WP&C is helping us transform our business. Their insights are phenomenal!”
“Wilson Perumal & Company's approach treats complexity as the enemy. Declaring war is the most direct route to an efficient, profitable enterprise. We declared war on the complexity in our portfolio, resulting in streamlined customer offerings and a more nimble business.”
“This was a quick and painless way to understand our true product profitability, and it challenges how we think about our business. I am extremely pleased with the results.”
“WP&C’s insights into our portfolio, cost structure and growth drivers have changed the way we think about our business. The brand management playbooks they developed for the business will be critical to how we make decisions going forward.”
“I have been more than pleased with what you have been able to accomplish in this time. Beyond my expectations...Spectacular!”
“Fantastic piece of work! You’ve really shed a lot of light on our business. Inmarsat will benefit enormously from your contribution and we will be using your structured thinking to guide us through the decision-making to come.”
“If you take all six times [past projects] where we looked at this, over the past ten years, and rolled them all up together, and multiplied by ten, it would still not be as good as this work.”
“Army personnel credit the collaboration between Joint Munitions Command, CAAA's higher headquarters, and consulting firm Wilson Perumal & Company for identifying areas to improve the munitions distribution process.”