Breakthrough growth and how to achieve it

The past several years of economic disruption are expected to persist. US bank shares drop as a crisis of confidence in the country's banking sector continues, while increased prices of commodities, resolutely high inflation and climbing interest rates force countries and multinationals around the world to continue to battle through to recovery in the face of economic headwinds.

Meanwhile businesses have been struggling to stay afloat, and some have already gone under completely. However, that does not mean you cannot prepare your own business to weather the storm. Surprisingly, times of difficulty and hardship can be an ideal environment for innovative businesses to thrive. Fearless innovators who challenge the status quo and embrace change can make a crucial contribution to our global economy and create new products that can help us navigate disruption.

Growth is at the heart of every firm’s ambitions, but how do you move beyond incremental gains to achieve breakthrough growth in tough economic times? From macro-economic and lifestyle trends, to consumer-led disruption and innovation breakthroughs, this event explores the opportunities for businesses to achieve breakthrough growth.

With this unsettled environment at the forefront of everyone’s mind, London Business School’s new event and podcast series, Think Ahead and the inaugural panel discussion, Breakthrough growth and how to achieve it took on these issues, producing a lively discussion and informed discussion.

The event, which took place on the morning of Tuesday 23 May 2023 at the Nuffield Hall at London Business School’s North Building, involved Julian Birkinshaw, London Business School Vice-Dean; Professor of Strategy and Entrepreneurship; Academic Director, Institute of Entrepreneurship and Private Capital (IEPC); London Business School Adjunct Associate Professor of Marketing Helen Edwards; Adjunct Professor of Economics, Dr Linda Yueh CBE, and Director, Strategy and Growth, and Chief of Staff at Johnson & Johnson MedTech EMEA, Chris McCarthy.

James Hurley who is the Assistant Business Editor and Enterprise Editor at The Times was the moderator of the event, and began the event by setting the scene.

A crisis of confidence in the US banking sector following the collapse of three small- to mid-size US banks in March 2023, doggedly high inflation, climbing interest rates and increased commodity prices have all brought additional pressure in the search for recovery. What is more, this recent economic disruption is expected to persist, so how, in such circumstances, can companies achieve the breakthrough growth?

The panel began by discussing the internal environment needed to exploit new opportunities, from making the right strategic choices, to creating the optimal culture and leadership for achieving growth.

Pondering the question of where growth might come from has exercised the minds of many a chief executive and entrepreneur.

Be wary of euphoria

Adjunct Professor of Economics at LBS Linda Yueh advised caution around unimpeded growth fuelled by euphoria as for every boom there is a bust. Linda, is the author of her latest book, ‘The Great Crashes: Lessons from Global Meltdowns and How to Prevent Them’. With clear-eyed analysis, Dr Linda Yueh identifies a framework to help recognise the early signs of a crash and mitigate the effects - all with the hope of preventing the worst mistakes of the past from being repeated in the next inevitable financial crisis. She warns about where the next one might come from and shows how her framework could contain it.

Dr Yueh cites the dot.com bubble as the last time that there was a massive build up in terms of euphoria around technology. More recently, valuations were so high by November 2021 that interest shifted from unicorns to ‘tetracorns’, valued at over $10 billion. The correction in market values finally occurred in 2022, triggered by the steep rise in inflation and interest rates.

Still room to grow

Johnson & Johnson is a a company that has been around for more than a century and continues to invest proactively in growth through R&D, acquisition, and a highly successful corporate venture unit called JJDC. It does so precisely because there are still opportunities to grow. With more than 60% of the global population having no access to healthcare, and one in ten people in the UK waiting for surgery, there is plenty of room for growth in the healthcare sector and MedTech space.

Growth through innovation

Established companies like Johnson & Johnson tend to follow the well-established route of acquiring companies and/or investing in innovation through shark tanks, venture funds and start-up labs. In companies where there is continuous integration of new business through acquisition, there is always the opportunity to learn, but there can be a flipside. Being customer-focussed can be forgotten in complex working environments, particularly matrix systems. Choices need to be made about where to focus and where to double down. Importantly, start-ups must be given time to succeed.

Indeed, most new ventures fail because they aren’t given long enough. Start-ups don’t just need top management’s buy-in at the start, they need top management’s stewardship. People expect the first few ideas to be successful and want to see profit immediately, but what if that breakthrough idea does not materialise for several years? A longer-term view allows for better success, and longer-term reporting can also play an important role here.

For a full, more detailed account of the event, click here.