Seven up - the principles that underpin growth

ONE OF the accepted,but nevertheless odd, principles of business is how company fortunes can be transformed by a management buyout, writes Roger Trapp. It is generally reckoned that what is essentially the same business can see a marked improvement with what is often the same management, because people are keener.

Freed from the yoke of being part of a large organisation they now have the impetus, not least because of the levels of debt they may be carrying, to make the organisation more innovative, efficient and attuned for growth.

However, Simon Philips of the management consultancy Bridgewater believes there is more to it than that. Research conducted among chief executives of such organisations as Vodafone, Kwik-Fit and Associated British Foods has led to the conclusion that there are seven principles for high growth which amount to a model for the high-growth organisation.

The principles are not revolutionary, but that does not make them any less valuable. After all, their importance still seems to escape many business leaders.

The principles are focus - one vision or goal "and clear values to match"; cohesion - everyone aligned behind the vision, with the top leading the way, though not to the exclusion of diversity; simplicity, as a principle throughout the organisation; pace - a sense of urgency and dynamism; conviction, or the confidence that ambitious goals are within reach; enterprise - the freedom to innovate, grasp opportunities and even mistakes; and greatness - not forgetting to be better in the eyes of customers and employees.

But Bridgewater does not leave it there. Behind each principle it has accumulated a set of "specific practices, implementation steps, benchmarks and templates" to help organisations build the excellence model.

With profit warnings and restructurings once more prominent on the corporate landscape and talk of recession in the air, Mr Philips is concerned that companies will first seek to respond in the ways they did last time round, by cutting costs. But the problem is that organisations are already so lean, such action would be impossible. They have to know how to grow.

But he believes there is often a lack of will to carry out the necessary culture changes, generally because they are seen to be time-consuming and difficult.

Companies where there are many meetings, huge committees and a lot of analysis rather than action tend to be the ones that have trouble, but even these can be turned around.