“The simultaneous pursuit of growth and profitability is one of the most exquisite–and difficult–leadership dilemmas. Bala Chakravarthy and Peter Lorange provide penetrating insights and persuasive real-life examples on how a company can address this dilemma through continuous renewal and internal entrepreneurship. Unusual for books on leadership, their discussion spans from theory through practical implementation.”
–Nick Shreiber, Former President & CEO, Tetra Pak Group
“A continuous renewal of the firm’s businesses is essential for driving its profitable growth. This book gives credible insights and rich examples on how these renewal strategies can be shaped and executed successfully. I am recommending it to my key managers and business friends–essential reading!”
–Peter Brabeck-Letmathe, Chairman & CEO, Nestlé
Drawing on extensive research with world-class companies, this book introduces four proven strategies for continuous renewal. You’ll discover powerful ways to protect and extend your core businesses; capture new opportunities distant from them; and “bridge” these two strategies with two others to evolve towards profitable diversification.
Then, through real-world case studies from great companies around the world, you’ll learn how to execute on these strategies–achieving superior growth and profitability in any business environment.
•Craft a “shared strategic architecture” for growth and profitability
Protect, extend, transform, build, and leverage
•Execute on your renewal strategies successfully
Integrate your efforts, encourage entrepreneurship, and manage risks
•Wield the tools of implementation
Utilize organic growth, acquisitions, and alliances more effectively
•Share one stage and one script
Find the right roles for leaders, managers, and internal entrepreneurs
•Promote continuous renewal from the top
Set vision, values, and culture...and manage the dilemmas of continuous renewal
Sustaining Growth and Profitability: World-Class Strategies, Proven Execution Techniques!
•Mastering the secret of growth and profitability: continuous renewal
•Emerging best practices from today’s most successful companies, worldwide
•Protecting, extending, leveraging, building, and transforming your core
•Deploying organic growth, acquisitions, and alliances intelligently
Growth and profitability. You need both. This book shows how to get both. It combines a complete strategic framework with start-to-finish execution techniques–all based on advanced research reflecting the best practices of today’s most successful companies. Through detailed case studies, the authors show how to sustain growth and profitability by protecting and extending your current market position, evolving to adjacent areas, and entering entirely new markets. You’ll discover better ways to integrate organic growth, acquisitions and alliances; task managers at all levels in the organization appropriately; and manage the non-stop dilemmas and tradeoffs you’ll face along the way.
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Dr. Bala Chakravarthy is Professor of Strategy and International Management at IMD, where he holds the Shell Chair in Sustainable Business Growth. His areas of expertise include strategy process, corporate entrepreneurship, and managing organic growth. He has served on the Board of the Strategic Management Society, and is an Inaugural Fellow of that society.
Dr. Peter Lorange is President of IMD and Nestlé Professor of International Business. His areas of expertise include strategy process, joint ventures, and international strategy. He serves as a board member for several corporations, and is an Inaugural Fellow of the Strategic Management Society.
Excerpt. © Reprinted by permission. All rights reserved.:
Praise for Profit or Growth
Praise for Profit or Growth?
"A continuous renewal of the firm's businesses is essential for driving its profitable growth. This book gives credible insights and rich examples on how these renewal strategies can be shaped and executed successfully. I am recommending it to my key managers and business friends—essential reading!"
Peter Brabeck-Letmathe, Chairman & CEO, Nestlé
"To create economic value all enterprises have to achieve sustainable and profitable growth. Chakravarthy and Lorange explore this crucially important and equally exciting challenge. They capture well Novartis' strategy, which focuses on innovation and our core value of bringing novel medicines to patients. Our success is fundamentally built on our alignment and the passion and creativity of our scientists, which has enabled us to discover and develop groundbreaking therapies, such as our cancer medicine Glivec."
Dr. Daniel Vasella, Chairman and Chief Executive Officer, Novartis AG
"Sustaining both profit and growth requires the continuous reinvention of the enterprise. Bala and Peter have brilliantly captured the essence of this process, moving us beyond the myths to practicalities. As they point out, unleashing the firm's entrepreneurial energy requires coordinated effort by front-line, middle, and top management. Managers at all levels in the organization will gain learnings from their insights."
Brad Anderson, Vice Chairman and CEO, Best Buy
"The simultaneous pursuit of growth and profitability is one of the most exquisite—and difficult—leadership dilemmas. Bala Chakravarthy and Peter Lorange provide penetrating insights and persuasive real-life examples on how a company can address this dilemma through continuous renewal and internal entrepreneurship. Unusual for books on leadership, their discussion spans from theory through practical implementation.
Nick Shreiber, Former President & CEO, Tetra Pak Group
"Bala Chakravarthy and Peter Lorange bring new useful insight to the leadership strengths required in continuously renewing companies."
Matti Alahuhta, CEO, Kone
About This Book
In Chapter 1, "The Performance Dilemmas," we describe the performance dilemmas that confront firms and the underlying strategy and execution challenges that executives must successfully meet to address these dilemmas. The book is organized in two parts: Part I devoted to strategy, Part II to execution.
Part I: Strategy
In Chapters 2, 3, and 4, we develop the continuous renewal framework. In Chapter 2, "Renewal Strategies," we describe four renewal strategies. The first two are the traditional strategies of protecting and extending the current core business of the firm and transforming the firm in search of opportunities and capabilities that are distant from the core. We advocate the use of two bridging strategies (build and leverage) that help diversify the firm's core, but in more evolutionary ways.
Protect and extend, transform, build, and leverage are not competing strategies, but rather complementary elements in a shared strategic architecture. In Chapter 3, "Continuous Renewal," we explain how the latter two can be combined to ensure continuous renewal and sustain profitable growth.
In Chapter 4, "A Blended Approach," we emphasize the supporting roles that organic growth, acquisitions, and alliance play in executing the four renewal strategies. These are three means to implement a chosen strategy, not strategies in their own right.
Part II: Execution
In Chapters 5, 6, and 7, we focus on the execution of renewal strategies. The focus is on organic growth and on the multilevel effort required.
In Chapter 5, "The Entrepreneur-Manager," we profile the entrepreneur-manager—the prime mover of the renewal effort—and describe the personal traits, professional skills, and experiences of a successful entrepreneur-manager.
In Chapter 6, "Sponsoring Renewal," we describe the important role that senior executives play in defining the renewal agenda, finding the entrepreneur-manager to run it, locating a suitable organizational home for the project, creating a supportive context to aid its implementation, and coaching the entrepreneur-manager to success. Having effective sponsors is important for developing and retaining good entrepreneur-managers.
In Chapter 7, "Directing Renewal," we examine the role of top management in providing the overarching vision, values, and culture to promote continuous renewal, and in managing the inevitable dilemmas in executing it.
We conclude the book with Chapter 8, "The Multiactor Process," providing an overarching view on how to sustain profitable growth. The appendixes to this book provide useful summary tables.
We do not provide simple do's and don'ts in this book. Driving profitable growth is simply not that easy. However, what the book provides is a realistic perspective on the multiple roles that have to be played successfully and coordinated effectively for sustaining profitable growth.
Top management naturally carries a large burden here. The roles that senior executives—business, regional, and functional heads—play in making this vision a reality is just as critical. They are the ones who identify what the right blend should be between efforts that are centered on organic growth, alliances, or acquisitions. The firm's organizational context is also set by them. Finally, the firm's entrepreneur-managers are the prime drivers of its renewal efforts.
Even though we have highlighted different roles in different chapters, we hope that, irrespective of their own roles, managers will see each chapter as relevant. After all, they are all actors on the same stage, delivering one script. They have to know and appreciate the multiple and coordinated roles that must be performed to sustain profitable growth.
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