You can’t cost-cut your way to greatness: you need to grow revenues

At a time when business models age faster than the latest iPhone, focusing on operational efficiency alone is not enough to succeed.

To grow your business, you need to build it from within (known as Organic Growth), or essentially buy it through mergers and acquisitions (known as Inorganic Growth). Either way, you need to stay relevant and competitive.

So for growth planning to be effective, it’s crucial to have a sound understanding of changing customer needs and be able to respond and engage with people where they are, not where they used to be.

By better understanding your customers, you can focus resources where they are needed, cut waste, and direct your spending to where it matters most.

Innovation mindset

If necessity is the mother of invention, then digital disruption is the father of business innovation in the 21st century. Indeed, with new technologies and markets, organisations need to constantly reinvent themselves to remain relevant and grow organically.

Interestingly, according to KPMG’s Growth Intentions Snapshot 2015, while a significant number of Australian businesses are planning for organic growth, almost one fifth of businesses indicated that they were having difficulty deciding on the best path to successfully attract, engage, and retain customers.

28% Businesses focus on operational efficiencies, 54% Businesses focus on company growth (Source: 2015 KPMG CEO Outlook)

Explore new growth strategies

After years of focusing on cost cutting, the need for business innovation is now compelling boards to dial up management capability to:

• Transition to new business models
• Enter new markets
• Expand existing offerings
• Deploy new technology

To identify which growth strategy you should follow, it is critical to understand the biggest threats facing your organisation and identify the most attractive areas of opportunity. See our recent post on how to validate your revenue growth strategy.

Whether it’s a new competitor, new regulations, or even tough economic conditions that you have to deal with, when it comes to exploring growth opportunities, it’s important to look beyond your current product or offering, and reinvent your value proposition.

Read more of this article: Lead Article | Truth 1 | Truth 3