The Mindset Your Company Needs to Grow Organically

M&A is central to many companies’ growth strategies. But you can’t grow by acquisition alone. Companies with more organic growth generate higher shareholder returns than those relying on acquisitions alone. But organic growth remains elusive. It’s been easier to go from big to bigger through M&A than new to big through entrepreneurship.That failure is not due to a lack of trying. Companies dedicate vast amounts of time, money, and effort to organic growth. The problem is that many companies have the wrong “operating system” for organic growth.For most companies, both M&A and organic growth are managed like rocket launches. An enormous amount of planning goes into anticipating every possible scenario and removing every possible risk. Once launched, the opportunity is micro-managed to ensure that everything goes according to plan.This might have worked in the past when markets moved incrementally. But in a global business environment that is changing exponentially, the market moves too quickly. Too much is simply unpredictable. The solution is to shift the mindset from “rocket launch” to “laboratory”. You need to be constantly experimenting, adapting, and learning — rather than analyzing, planning, and optimizing.

Source: HBR May 22, 2018

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