The Hindu Business Line : Alternative to M&A deals

In an age when mergers and acquisitions (M&As) make for dramatic headlines, it may seem old-fashioned to talk about growing from within. But Edward D. Hess does just that in The Road to Organic Growth ( www.tatamcgrawhill.com).

Inorganic growth through the M&A route may not be negative, but growth generated internally frequently results in better returns on investment, stock value improvements, and lower employee turnover, he argues.

A great takeaway from his research is ‘six keys to organic growth’, beginning with an elevator-pitch business model. That is, an easy-to-understand strategy that can be explained to and understood by line employees.

Two, keep a ‘small-company soul’ in a ‘big company body’, else you can’t be entrepreneurial at the point of customer contact.

“Entrepreneurial employees are like entrepreneurs – they are energised and engaged in the day-to-day business because they feel that they have some control over their destiny – they have autonomy and respect – and they feel rewarded for their efforts.”

Measure everything, urges key three. While the – financial metrics are common, deploy operational and behavioural measurements to ensure accountability is transparent, fair, objective and mission-critical.

Four, build a people pipeline. “Have a deep bench of engaged employees – people who have bought into a system in a committed way – a key competitive advantage.”

Key five of organic growth successes is leaders who are humble, passionate, and focused. And finally, ‘be an execution and technology champion,’ day after day, exhorts the author.

Suggested read before you sign the next takeover deal.

D. Murali

http://BookPeek.blogspot.com