Growth remains top of mind for Canada’s private business owners and

leaders. This is not surprising as growth has been flat in virtually

every sector of the Canadian economy for years. Competition has
intensified as new and disruptive businesses—both foreign and
domestic—have entered the Canadian market attempting to take customers
from existing players and capture a greater share of the market.

In this new economy, the recognized entry barriers are falling. The
requirements for infrastructure, research and development and capital
expenditure are lower than ever, and competitors are no longer defined
by industry.

As a result, it’s becoming more and more challenging to achieve

meaningful growth in this fast-changing, hypercompetitive and uncertain
environment. Despite these headwinds, private business owners remain
optimistic about their growth prospects. In fact, 89% of Canadian
respondents to PwC’s Global Family Business Survey
<https://www.pwc.com/ca/en/private-company/family-business.html> expect
to grow over the next five years—by 10% annually or more, in many
cases.

But are these growth objectives realistic? In the same survey, 81% of
respondents said they planned to achieve growth by pursuing the status
quo. Yet only 15% of Canadian family businesses achieved better than
average revenue growth in at least 8 of the past 10 years. This strongly
suggests that the status quo or business-as-usual approach doesn’t
generate the type of incremental growth companies seek.

Creating a coherent and grounded growth strategy

In our experience, many companies focus on growth without having a

well-articulated growth strategy that’s rooted in the organization’s
capabilities and capacity to execute.

Such an unfocused and opportunistic growth approach is a recipe for

failure. As a result, owners and management teams find themselves with a
number of competing priorities, pulling their teams in different
directions, which often leads to either unprofitable growth or paralysis.

To deliver sustainable and profitable growth, *strategic growth thinking

*must come first, and only then can it be followed by *strategic
action*, where owners and managers become aligned and laser focused on
the priority growth initiatives that will deliver the company’s
highest-impact results.

To begin constructing a growth strategy, owners and managers need to ask

several simple but critical questions:

The answers to these critical questions will help shape a coherent and
grounded growth strategy.

In principle, companies’ growth strategies should always focus on

achieving sustainable, profitable growth over the long term (three to
five years)—not short-term, opportunistic balance-sheet boosts that
deliver no lasting impact. Companies should compete on value, not price,
since price is a swift race to a commoditized bottom. They should also
concentrate on driving revenue through higher prices and larger volumes;
cost-cutting and austerity measures may increase profits, but their
upside is capped and the impact is short-lived.
 Core business growth comes first

In general, there are three overarching pathways to achieve company

growth: /optimize the core business/; /extend the boundaries of the core
business;/ or /re-scope and reinvent the core business/. Undertaken
together in a carefully sequenced and de-risked manner, these pathways
will propel the transition of your company from its present business
model to the future business model, with each move reinforcing the
previous one.

*So what are the sources of growth?*

Based on our experience with private and public companies, owners and
managers often overlook the headroom for growth in their core business
and focus on either pursuing adjacent markets or searching for
uncontested or new market spaces, truly believing that the grass is
greener on the other side.

We often find that companies still have sufficient juice or upside

opportunities to exploit in their core business. These opportunities are
often hiding in plain sight in the companies’ own backyard, across
their
businesses and markets. These resident core business opportunities can
be unlocked faster and easier than adjacent or transformational
opportunities, and typically carry lower risk and up-front investment
given the companies will be using existing capabilities and assets.

It’s best to always capture and maximize the untapped growth potential
within the core business before pursuing riskier, more uncertain
adjacent or new business opportunities.

Optimizing the core business involves penetrating the existing market

even more from existing customers, products and services. Core business
growth can be achieved through a number of growth strategies, including:

* increased customer share of wallet

* new customer acquisition
* product or feature improvement
* increased promotion and brand awareness
* stronger reach through increased distribution channels
* price calibration

A case in point is Google’s strong focus on its core business through

continuous improvement of its email application and recent launch of its
corporate email and digital calendar services to rival Microsoft Outlook
in the enterprise and corporate space.

Despite the advantages of optimizing the core business, very few

companies do this successfully. Instead, companies look for growth far
beyond the boundaries of their business, which leaves their core
vulnerable, drifting them to a highly uncertain course, and wasting
their management efforts and resources.

Every business has significant profitable growth potential tucked away

in the corners of its core business, customer base and offerings.
Uncovering that potential is the first step of any company’s growth
journey—and the foundation for more growth to come.

Look for the second part of our series on achieving growth soon.