The Four Biggest Myths Of Organic Growth !

Businesses today associate organic growth with Search Engine Optimisation. However, the most basic form of organic growth is the expansion of revenues through increasing sales and consumers.

The pandemic opened up avenues for growth in different areas for various industries. The failure of one company was an opportunity for another to grow by acquiring it. However, organic growth often stems from three main areas.

Companies either create new offerings, invest in growth opportunities, or optimise their capabilities. While this is a well-established norm in the business world, only 30% of businesses identify real opportunities for organic growth.

At Growth Jockey, we help new and old businesses identify their windows of opportunity. We support them in their growth journey by providing end-to-end business development solutions. A data-driven agile approach is at the core of our culture.

Our experience with companies often finds firms holding misconceptions about a particular approach. Some may arise from a negative business deal, while industry standards may influence others.

In any case, business myths are most harmful when they impede one's ability to grow organically. Therefore, this article lays out the four most common myths about organic growth and how to shift perspective on them.

Understanding Organic Growth

Organic growth is crucial to any firm's future. According to a study by McKinsey and Company, most high-performing companies use multiple strategies for organic growth. They are also better than their non-performing counterparts at developing capabilities within their firm.

To build organic growth, business leaders touch upon one or all of the following key areas-

• Investment: Enhancing organic growth by reallocating funds from various streams into high-growth ventures.

• Creation: Increasing chances at organic growth by offering new products or services or adopting a new model.

• Optimisation: Growing organic business by constantly optimising core capacities such as pricing, marketing, and sales.

Despite the common knowledge about the above mentioned strategies, firms often take a singular path. Others refuse to change an approach that is no longer working for them.

It is vital to grasp the biases and myths of organic growth to avoid these mistakes and make a diligent decision.

Busting the Four Biggest Myths of Organic Growth

According to a study, high-performing businesses have debunked the following myths of organic growth and made their way to the top.

Myth 1 : Creating New Offerings Is the Best Approach

Launching new products and services quickly gives business leaders the healthy adrenal rush they need. It can tempt executives to view the creation of new products as the primary way to grow organically.

However, relying heavily on this strategy may put forth certain risks of organic growth.

In reality, data suggests that the majority of participants in a McKinsey Global Survey take other paths more often. Constantly developing and introducing new products uses more resources and adds to the company's variable costs.

Additionally, adopting or diversifying business models may require you to start from scratch. Only 34% of organisational changes end up succeeding.

Hence, 44% of the abovementioned participant companies engage in the reallocation of funds and resources into growth ventures. This is because the core value of any investment has organisational growth as its primary aim.

Investment best practices by default include setting an organisation-wide agenda for growth metrics. A systematic evaluation of these metrics helps leaders align investment decisions.

Top performers are often found to have a firm grip on their performance analytics to make data-driven decisions. Companies that diligently reallocate their resources give out around 10% return to shareholders on average. Negligent reallocators deliver only 6% on average

More than creating new products, allocating current resources and budgets results in a growing company valuation.

Myth 2 : A Winning Strategy Will Continue Winning

Companies that fail to adapt to the changing market scenario often risk their survival in the long run.

For most companies, it can be tempting to reiterate a previously successful strategy. But as reality has it, one must keep building new competencies to continue growing.

According to research, top-performing companies have specific core capabilities that contribute to their growth at different stages. Consequently, newcomers can focus on these capabilities and optimise them as organic growth factors.

For example, until 2012, Adobe focused on its performance analytics and played with pricing to draw maximum revenue out of its boxed products. However, there is only so much that these capabilities could bring in. During the recession, Adobe saw a 20% fall in its numbers

That is when the leadership looked at exploring and adopting a new model and focused on the customer experience. The SaaS model adopted by Adobe is now resulting in consistent double-digit growth.

What worked before may only sometimes work as you grow. A company's potential changes as its size grow. Re-evaluation and adaptation are the way to go.

Myth 3 : Developing Innovation Capability Is Not Possible

Growth and innovation go hand-in-hand. However, innovation may earn a bad name among companies due to failed ventures. Moreover, because innovating is problematic, leaders may often be discouraged by the thought that ‘creativity' comes naturally and cannot be developed.

Only 6% of executives are happy with how their innovations perform. However, to develop innovation, companies must accept risk.

According to McKinsey, top-performing firms foster a culture where minor failures are considered integral to the innovation process. They also showcase higher flexibility for risk-taking by employees than their underperforming counterparts.

The development of innovation capabilities can arise from other business processes.

Take DHL as an example of organic growth through innovation. DHL allows employees to work concurrently with customers to draw unique solutions for complex issues facing the company. The result is an innovation-led box of solutions and peers focused on innovating.

Growth Jockey, too, engages with clients to gauge their issues and understand them at length. Our dedicated team of experts works like your virtual co-founder and think tanks simultaneously. Our goal is to offer you data-driven solutions for business growth with innovation at their core.

Myth 4 : Organic Growth Higher Than the Industry Rate Is Not Possible

The industry average reflects the growth of individual businesses. However, it is crucial to understand that an industry benchmark cannot become an excuse for sluggish growth.

Some industries, for example, the business services industry, may have a growth rate lower than industries that offer products. This knowledge can become a mental barrier to a growth a company achieves.

Data suggests that every industry has high-performing companies. McGrath's Harvard Business Review on growth outliers identifies at least 5% of 4793 companies that steadily grow revenue. The main focus is that companies can go beyond the industry average by organising the right capabilities.

Growing companies must realign their focus on different capabilities based on their growth stage and use a diversified approach towards creation, investment, and optimisation.

Growth Jockey realises the potential of innovation in organic growth. Using the right strategies, companies can enjoy 10X revenue growth in no time. However, accessing these strategies is the primary hurdle.

We at Growth Jockey help you access and unlock organic growth with a guided business framework and technological consultation.

Looking Ahead

Reaching the organic growth expectations of a business can take time and effort. The journey can be more challenging when there are mental or normative barriers that impede growth.

The key to 10X organic growth lies in adopting not one single path or all at once. Instead, it is realigning growth agendas and strategies as per the stage of business performance.

At Growth Jockey, we are committed to helping businesses achieve organic growth through tailor-made strategies that address the specific challenges they face across diverse industries. Regardless of the scale of your company, whether it's a small-scale enterprise or a large corporation, we can provide you with the expertise and insights needed to drive sustainable growth.

Take a proactive step towards unlocking new opportunities for your brand by reaching out to us today!