Challenges of Achieving Consistent Growth
A revenue gap is the difference between revenue goals and actual results.
How to close the gap
is the essence of strategy.
Challenges of Growth
With relentless changes affecting the markets, long-term success will ultimately depend on a company's ability to synthesize, adapt, align and renew itself faster than the competition.
Top-line revenue growth continues to be the primary driver of long-term company performance. But increasingly the complex business environment makes steady growth more difficult to achieve. Uncertainty, speed of change and volatility are trends here to stay, with impact and consideration that can’t be ignored.
An increasingly complex world demands a different kind of decision-making. In the 21st century, you're making decisions and setting direction amid increased ambiguity. Each decision contains a guess about the future.
In turn, this guess holds many assumptions about the complexity and dynamism of internal and external factors that will impact future results.
Aligning the Organization
Strategy is usually planned by few and executed by many. Too often, those responsible for executing the plan are not aware of the underlying assumptions, direction or roles and responsibilities that need to be in place and understood to achieve objectives.
Several studies report that over 90% of typical workers do not understand their company's strategy, nor are they aligned with it.
If your company resources and growth initiatives are not aligned and tightly linked with your strategy, then performance will usually lag revenue objectives. If unresolved, this creates a revenue performance gap between your top-line objectives and actual results.
Closing Revenue Performance Gaps
A performance gap is the difference between an organization's revenue goal and its actual results, typically measured in terms of top-line revenue.
How to close that gap is the essence of strategy.
The challenge for many organizations is to establish an ongoing process that surfaces relevant cross-functional issues, misalignment or miscommunication that may contribute to lack of performance, then agree to an action plan that will eliminate such gaps.
Deconstructing this gap into actionable components shapes your key revenue initiatives and drives strategy. In today’s dynamic environment, identifying and understanding what’s causing performance is more critical than ever.
In a recent poll by PwC of over 1400 CEO's in 83 countries, "only 35% are very confident their companies’ revenues will grow this year – the lowest percentage since 2010. In addition, 66% surveyed said there are more threats to growth today than there were three years ago."
Managing & Executing Strategy
Organizations often lack a common, descriptive and measurable framework for translating strategy into actionable plans. And in this increasingly crowded and competitive market, the margin for error is greatly reduced.
In a recent HBR study of over 350 CEO's, only 15% said their growth was inhibited by lack of opportunity. Virtually all of them were more concerned about internal inhibitors to growth, with 77% citing factors related to organizational effectiveness (poor execution) as the cause of slower growth.
Built-in competitive advantages have less effect now. In order to win business, companies need to execute consistently and with more precision than ever before.