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Fundamental lessons on long-term profit growth

07 Mar 2011

Very few companies achieve consistent profit growth year after year but a new book by two business school professors offers practical guidance to help firms improve their chances of doing so.

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In Beyond the Familiar, Patrick Barwise (London Business School) and Seán Meehan (IMD) go back to basics: actionable customer insights flowing freely through the firm, leading to relentless customer-focused innovation and an increasingly strong, trusted brand. They place particular emphasis on open organizational culture: “Again and again in our research, we have seen how poor framing, fear, vested interests, complacency, and denial block the free flow and discussion of the market information and ideas that power customer-focused execution and innovation and, ultimately, long-term growth. Open organization is, therefore, at the heart of our framework. ”

According to the authors, open organization enables firms to achieve four other imperatives that directly drive sustained growth:

• Offer and communicate a clear, relevant customer promise
• Build customer trust and brand equity by reliably delivering that promise
• Drive the market by continuously improving the promise, while still reliably delivering it
• Get further ahead by occasionally innovating ‘beyond the familiar’.

To illustrate its message, the book uses a wide range of case studies of both well-known, large companies (Nokia, Motorola, Procter & Gamble, Infosys, Philips) and some smaller, less well known ones such as Research Now (online market research) and Aggreko (world leader in the rental of power supplies and other essential services).

The book has won lavish praise from business leaders. According to Sir Martin Sorrell, CEO of WPP, “The value of Beyond the Familiar lies almost as much in the silver bullet solutions it debunks as in the infinitely wise marketing principles it advocates. In their search for the secrets of consistent growth, Barwise and Meehan distil the experience of others with merciless objectivity. Shareholders could sleep better at nights if every CEO had absorbed their fundamental lessons.”

Gary Hamel, recently ranked “the world’s most influential business thinker” by the Wall Street Journal, says, “Profitable growth isn't sustainable without relentless, customer-relevant innovation. Lucky for you, Beyond the Familiar is filled with insights and advice on how to make this happen. It's a must-read for anyone who wants to get a jump on the future.”

Gerard Kleisterlee, CEO of Philips and recently appointed chairman of Vodafone, comments: “While there is no single recipe for long-term organic growth, Barwise and Meehan provide a very practical framework, illustrated with many real-life examples of both success and failure that will resonate well with any CEO confronted with this eternal challenge. A must read.”

For further details, see www.beyond-the-familiar.com