Historically, companies have developed specific strengths that have helped them thrive. These could be any combination of customer relationships, operational know-how, R&D capabilities, technical infrastructure, or sales channels. Until recently, such trusted playbooks worked to keep companies growing at a steady clip. But in today’s innovation economy, these traditional levers are often not enough. For most established companies, there are fewer new geographies to enter, fewer obvious M&A moves to make, and fewer well-worn growth paths to take. Now, what’s increasingly fueling organic growth for companies are their business-building capabilities.
Building and scaling businesses—whether those are new products, divisions, spinouts, or joint ventures—is like starting a new workout that builds muscles someone didn’t even know they had. Just as it takes commitment to see results from lifting weights, it takes dedication to get business building right. It requires crystallizing ideas, creating early road maps, mobilizing capital and talent, and executing and scaling. It’s arduous, but the rewards are worth it. Our research finds that companies that invest 20 percent of their growth capital into business building achieve revenue growth two percentage points higher than those that don’t.
Many CEOs recognize the importance of developing their business-building muscles. In a recent global survey of more than 1,100 executives, half said that business building is one of their top three strategic priorities. We have seen that enthusiasm from CEOs in many sectors, including agriculture, financial services, healthcare, manufacturing, retail, and technology. To get business building right, part of the “secret cocktail” is acting with high velocity—always tempered with judgment—paired with an openness for ecosystem collaboration and partnership. It’s an experimental process.
For companies in established sectors, this type of “move fast and break things” ethos can feel uncomfortable. But it’s a crucial way to stay ahead of uncertainty. Early in my career, I spent almost a decade working in the intelligence sphere, where I learned the importance of constantly building new capabilities that adversaries didn’t expect as a critical way to stay ahead. What it takes to succeed in the business world is not that different. CEOs used to rely on the fact that their companies would grow in a predictable way for at least the next five years. Not anymore. Now, a lot can change in five years.
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