The misunderstood role of the middle manager in driving successful growth programs

doi:10.1017/CBO9780511618055.009

9 - The misunderstood role of the middle manager in driving successful growth programs

Published online by Cambridge University Press: 03 December 2009

Rita McGrath

Edited by

Edward D. Hess and

Robert K. Kazanjian

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Rita McGrath: Affiliation:
Associate Professor of Management, Columbia Business School, Columbia University
Edward D. Hess: Affiliation:
Emory University, Atlanta
Robert K. Kazanjian: Affiliation:
Emory University, Atlanta

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Summary

Organic growth: more rare than you think

Growth. The term has become a mantra in business. As the other chapters in this volume suggest, driving organic growth for the leaders of established companies is essential, urgent, and critical. As the other chapters also suggest, it is also extraordinarily difficult.

To get a sense of just how hard it is, let us consider some recent evidence. We created a sample of publicly traded firms (drawing from the Factiva database) with market capitalizations in 2004 of over $1 billion. We then established reasonable criteria for what a healthy, growing firm might look like (using revenue/sales growth). We thought a modest target of 5% a year would be fairly conservative, and thus selected firms with three-year average growth rates (from the 2001–2004 period) of 15% or five-year average growth rates of 25% (in the United States), and a three-year average growth rate of 15% and a four-year average growth rate of 20% (for non-US firms). Of this population, 583 of the US firms met the three-year growth cutoff, and 248 also met the five-year cutoff. Of the non-US firms, 348 met the three-year growth target, while 179 also met the four-year growth target. This yielded a population within the world's highest market capitialized firms of 427 that were able to achieve a sustained growth rate in the early 2000s of at least 5% a year.

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Type: Chapter
Information: The Search for Organic Growth , pp. 147 - 171

DOI: https://doi.org/10.1017/CBO9780511618055.009 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2006

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