When Growth Stalls – 1 Page Review

Introduction It’s offering advice for avoiding growth stalls, drawing from practices currently in use at large, high-growth companies to foresee possible stalls and head them off. Article gives four categories which regarded as main reason for growth stalls. A premium position backfires, innovation management breaks down, core business is abandoned prematurely and company lacks a strong talent bench. The key point is that all of the most common causes of growth stalls are not come from external force. It’s from management’s failure. Thus it’s knowable and preventable.

To spot the sign of growth stalls, they suggest us to use diagnostic self-test they developed. It’s the asking, what company’s senior managers have seen in their markets, in their competitors, in their own internal practice that might be alert of impending stall. To prevent the growth stalls, they recommend us to make strategic assumptions explicit and carry forward it relevance and accuracy. Thus, agility for reacting to changes of circumstance will be improved. Four practices are required to carry out that process. First, commission a core-belief identification squad which consisted with employees who are less stick to current orthodoxies.

Second, conduct teams which develop visions of your company’s future five years hence. Third, appoint a shadow cabinet. Lastly, ask a venture capitalist to sit in on strategy reviews and probe for weakness. Authors’ insist that on the strategy agenda, guarding against growth stalls should be at the top. And firm should renew their competence in strategy in this point. Limitation and defect The authors’ thrust is reasonable theoretically. In intellectual approach, it’s appropriate and fresh idea. However, since theories are based on consequences, it entertains a doubt to rationalize theories in results.

Consequently, it’s conflict against real-business situation. First of all, there are a lot of brands who are maintaining their market leadership although they undergoing four critical causes of growth stall. In real business area, there are bunch of brands which take their competitive advantage as product differentiation therefore don’t care their rivals although they’ve got cost leadership. Harley Davidson or John Galliano will be the typical cases. Both of brands even don’t care about customers’ preference. Rather than that, they make customer to be attracted by their brands by customer themselves.

Particularly in the luxury good market, brands do not try to stick their concept as contemporary or trendy. They persists their own color. (From research by Custo Barcelona in 2010) Moreover, Asahi Breweries, who’ve got competitive advantage by abandoning core product prematurely and urgently replace it to new product, can be refuter of articles theory too. (Information from Harvard Business School in 1994) Secondly, there are too many restrictions to absorb their tools in real business. Appling self-test to foresee a stall is not that easy as they insist because it’s unclear to define the fundamental reason of the phenomenon.

It can be caused by the economic recession of whole industry, fed in the customer’s preference, where product lifecycle is, or maybe it can be signal of stall. We can’t confirm fundamentally where the drawback is started. Besides utilize four practices which assist to make strategic assumption is more complicated. We can certain that cost of adopting these practices will be high, but can’t confidence how effective it will be work. Efficiency of those practices will be different from each company’s organization, corporate culture and so on. Therefore sometimes it can be aggravate of the risk.

In addition, inviting a venture capitalist can be more risky than their effectiveness. Finding faithful and influent VC who is assured to not leak the restricted information about corporation will be huge task to solve. Anyway, to reform this thrust, I’d suggest not pass over externalities. They’ve too many weighted in management problem. More fundamental causes will be arises in external environment, such as, threat of substitutes or technological changes. Then, mention about difference between industry and concrete supplementation for their tools which demonstrate its actual effect in really business will be required.