Reigniting growth in stagnant industrial companies

This article on the Bain & Co website looks at the issue of why so many industrial companies plateau, rather than continue to grow.  From talking to these companies, Bain & Co identify that it is not external factors that prohibit revenue and profit growth, but internal factors, specifically organisational and business complexity.

They identify two interlinked “vicious cycles”.  Organisational complexity derives from senior management becoming more distant from customers and the front line and ends up with a lack of innovation.  Business complexity derives from a conservative approach to target setting and budgeting so that strong products/services end up coasting and weak ones take up too much of senior management’s time.

To overcome this, Bain & Co propose what they have termed the “Founder’s mentality”.  This comprises three main elements:

  • “an insurgent mission” i.e. focus on the customer
  • “an owner’s mindset” i.e. think like an owner who typically dislikes bureaucracy and trims costs relentlessly
  • “a frontline obsession” ie support the operations, especially front of house.

They then present two case studies of how this has been put into practice.

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This entry was posted in Chap 03 Processes and life cycles, Sector: Manufacturing and tagged , , . Bookmark the permalink.

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