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 -Paul Niven

 

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 September 2013 |    www.senalosa.com
   
 Hi Everyone.  

In case you're scoring at home, this is my first dispatch in several months. We're all so inundated with reading material these days that I've decided to limit the number of newsletters I send. It was gratifying to hear from many people when they didn't receive a regular correspondence, and I thank them for that. Also, a number of you told me how much you enjoyed the book reviews, so I'm happy to include two new reviews here. Look for more newsletters in the months ahead, and as always if there is a topic you'd like me to discuss, please send it along.

 

Speaking of books, my latest will be out next Spring. I'll give you a sneak peek at the cover art soon. 

 

I invite you to check out what's new at Senalosa.com and follow me on social media, including Facebook, Twitter, and YouTube 
 
This Month's Topic: 
A Balanced Approach to Driving Growth
 

If you ask executives at any for-profit enterprise to outline their key priorities, you're certain to hear the word 'growth' at or near the top of the list. Increasing revenue has become an unquestioned barometer of corporate success, and organizations the world over are constantly scanning their strategic frontiers, attempting to open new markets, find new customers, and enhance the all-important top line.

 

But growth is remarkably difficult to achieve, and sustaining it is more elusive yet. Writing in the Harvard Business Review, Rita Gunther-McGrath reported that only 8% of 4,793 companies in a recent study sample grew their revenues by at least 5% year after year. Authors Zook and Allen report similar findings, noting that: "A decade ago we found that only about 13% of companies in the world had achieved on average even a modest rate of profitable growth (5.5% in real terms) over the decade while also earning their cost of capital. In the last decade, ending in 2010, the percentage had dropped to only 9% - this despite the fact that well over 90% of companies aspire to this level of performance in their strategic plans."

 

In spite of the substantial challenges associated with growth, executives continue to see opportunities all around them. In one study 50% cited 'tremendous opportunity' in the North American market, 65% in Europe, and more than 85% in Asia. A mere 15% suggested growth was inhibited by a lack of opportunities. However, almost all respondents were concerned with internal barriers such as: organizational effectiveness, excess complexity, difficulty achieving focus, or a risk-averse culture.

 

Reading these statistics only bolsters my confidence in placing the Balanced Scorecard at the strategic helm of any organization. Growth cannot magically result from sheer force of effort or wishful thinking, and certainly can't be considered in isolation. It must be cultivated through an execution approach that recognizes the power of balance and inter-dependency inherent in the Scorecard system. Our path to sustained profitable growth begins in the Employee Learning and Growth perspective, where every organization must determine whether they have the right talent to spot and exploit growth opportunities. Talent is just one element of the winning equation, however. It is here that we also assess, using engagement surveys and other techniques, whether the firm's culture is aligned with a strategy focused on growth, and reflects the risk-taking that is typically necessary to achieve that end. In the Internal Process perspective we highlight the differentiators of our value chain that propel our unique value proposition to customers. This perspective also provides the opportunity to take a critical look at complexity issues that may plague growth initiatives. Market share and customer loyalty are achieved when processes and people align in a common direction, and are reflected in the Customer perspective. Finally, the 'end in mind' of our strategic story, the growth we so highly covet, is manifested in the Financial perspective.

 

In this time of rapid change, disruption, and globalization there are clearly opportunities for the intrepid and innovative among us to create sustained profitable growth. Organizations wishing to solve the growth riddle should look to the Balanced Scorecard to propel their journey from strategy to success. 

 
Paul's Bookshelf

  

Here are two books I recently read and recommend:

 

Your Brain at Work  

by David Rock

Harper Collins, 2009 

 

Over the past few years a number of books on the emerging brain science and its applications for daily living have been released. This is by far my favorite. Rock strikes the delicate balance of arcane theory and practical application beautifully by framing his key concepts in the form of a story. The book tracks an overly busy couple, Paul and Emily, and through vignettes we discover how brain functions influence their day-to-day decisions and interactions. Rock underpins the narrative with the latest research, but never in a dry and academic way. He uses anecdotes and metaphors liberally, so even the neuro neophyte (among whose ranks I count myself) can remain happily engaged in the text without becoming bogged down in scientific jargon. Since reading the book I've found myself returning to its core tenets frequently, and find it comforting to have a rational explanation for what I'm feeling and how I'm acting at any given moment.  

 

 

Switch: How to Change When Change is Hard
by Chip Heath & Dan Heath
Crown Business, 2010
 
Switch is a very compelling offering from the Heath brothers, who brought us another of my favorites "Made to Stick." In this volume the authors share a wide range of quirky and interesting stories to illustrate their core premise that in order to create meaningful and lasting change you must embrace both reason and emotion. To help us on that path, they use the analogy of an elephant and its rider. The rider represents our logical and rational selves, while the elephant represents our emotional side. With that distinction clearly outlined, they go on to share convincing case studies, amusing anecdotes, and research from sociology, neurology, and psychology that can help any person (yes, much of this applies to our personal lives) or organization create real change. 
That's it for now. Please stay in touch!   

Paul R. Niven, President
The Senalosa Group  *  www.senalosa.com