Fit for Growth

2Becoming Fit for GrowthThe Restructuring and Renewal Journey

As competitive and economic pressures mount, we are seeing companies anxiously searching for ways to bolster returns and grow their business. They are looking for breakthroughs to innovate new products and services, enter new markets, or offer more compelling customer value propositions—either organically or through mergers and acquisition.

To capture that increasingly elusive growth, companies need to be Fit for Growth. They need to have gone through the rigorous discipline of identifying the three to six distinguishing strengths (or, as we call them, differentiating capabilities) that give them a “right to win”—the ability to compete more effectively than competitors in the arenas where they choose to do business. Then they need to build their strategy—and hence their cost structure and organization—around that right to win.

As we've noted, this strategic exercise requires hard choices—about what markets to participate in, what products and services to keep or cut, what customers to serve, and what capabilities to invest in or prune. Until companies make those hard choices about the few things they can and should do exceptionally well to thrive in the competitive space they've chosen—and consciously divert resources from everything else—they will not be Fit for Growth.

How do you know if your company is fit or unfit for growth? Our diagnostic is deceptively simple.

1. Have you identified the differentiating capabilities ...