Ernst & Young on Growth – If a Company Needs Growth It Needs a Plan

For years, E&Y has been surveying corporations around the world on many subjects including a recent thread on what it takes to grow a company in today’s markets. This year’s report was especially sobering in a couple of ways. One such sobering thought was that after 2-3 years of “recovery” one would think that growth on a company level would be getting easier. However, the E&Y survey confirmed that growth for most companies it is actually getting more difficult to achieve. In E&Y’s own words:

“Our research and day-to-day work with businesses around the world suggests there is not going to be an early return to the business conditions that drove growth in the past decade. The economic forecast for the coming years is for a slow recovery and some slowdown even in the faster growing emerging markets, as demand in developed markets remains weak. To grow and succeed in such an environment will require that companies intensify their competitive efforts. Today’s market is demanding, oversupplied and increasingly price sensitive. Most growth will have to be won from competitors. There will be very clear winners and, equally, very clear losers.”

Most “growth will have to be won from competitors” implies that companies will have to have new, incremental and pro-active plans in place to steal share from others. This however is a particular challenge for many middle market companies and for many PE firms. Research shows that most middle market companies do not generally have any controlling strategic and tactical plans in place, much less having the business acumen to know how to plan with new, incremental and pro-active steps.

The E&Y study was released on their web site last week and is called Competing for Growth – Winning in the New Economy. It can be found by following the following link:$FILE/1110EDA034_competing_growth_main_report_web.pdf

The study goes on for pages highlighting many basic concepts to help companies grow and is a good read for anyone who wants a refresher on the basic challenges facing those companies who need growth. In our minds however, the most basic challenge always has been and likely remains first developing an actual plan to drive that growth.