Building and Sustaining a Growth Pipeline

Achieving and sustaining growth is perhaps the foremost goal and responsibility of every executive management team, since the advent of business and commerce. Yet in today’s era of digital transformation, globalization, disruptive competition, and rapidly changing customer expectations, the job of understanding where and how to grow and protect your business is perhaps more complex and challenging than ever.

To stay ahead, says Krishna Srinivasan, Global President & Managing Partner at Frost & Sullivan, companies will rely on agile and structured processes designed for continuously surveying, identifying, and scoring the many opportunities and threats ahead. To thrive, companies need the added capacity to analyze those opportunities in the context of their core strengths, to identify and implement the right strategies based on a deep and detailed understanding of what lies ahead.

For nearly 30 years, Srinivasan has dedicated himself to analyzing growth markets and opportunities, and to acquiring real-world knowledge by consulting with both leading and emerging businesses. He joined Frost & Sullivan in 1991, and in the ensuing years has played a formative role in forging the global company into a leading integrated research, analyst, and consulting firm with a single, laser focus—helping companies realize new opportunities for growth. In a dynamic business landscape continuously transformed by technology, disruptive business models, fast-emerging global markets, and constant competitive reinvention, Frost& Sullivan’s services and solutions address a universal need.

Frost & Sullivan was formed in the early sixties as a pure research firm dedicated to analyzing emerging technologies—something that few companies, if any, were doing at the time. Today, a core asset that differentiates Frost & Sullivan from traditional consulting firms is its ability to deliver a continuous stream of real-time knowledge and insight across a wide range of technologies, markets, products, and industries around the world, and to help its clients turn those intelligent insights into effective strategies for growth. The firm’s growth insights are generated by a team of nearly 1,000 analysts stationed strategically around the world and supported by a fast-growing management consulting capability.

“We are focused on one thing and one thing alone—helping our clients accelerate growth,” says Srinivasan. “It’s the essence of everything we do. We help companies grow their business, not just in the short-term, but in the intermediate to longer term.”

Srinivasan points to the stock market as one example of the overriding importance of growth as the most critical metric of business success. “Many people find it surprising that the stock prices of companies tend to rise much faster when they drive top-line growth, rather than EBITDA growth or margin growth,” he reports. “When valuations of companies are developed, they’re based on price per share and earnings per share. But in reality, even Wall Street tends to reward top-line growth more than margin growth.”

Understanding where markets, industries, technologies, and business models are heading and how these emerging changes will create future opportunities is vital for growth. While most companies would claim they do this, too few have a rigorous and structured process for developing and nurturing what Srinivasan calls the “growth pipeline.” This approach entails a comprehensive survey of a company’s opportunity universe and then a winnowing down of those opportunities to the three or four that represent its sweet spot for growth. Frost & Sullivan is increasingly moving toward a “growth pipeline as a service” business model that brings all of a client’s assets to bear in a continual process of recognizing where opportunities exist and nurturing their growth through the pipeline.

Too often, Srinivasan  comments, companies develop their growth strategies based on top-down decision-making in the C-suite and board room: “They take a vote and move forward, but they don’t have a system that captures opportunities from all corners of the organization…. They don’t have a system that captures ideas from their external ecosystem of partners and customers.”

Successfully analyzing and realizing growth opportunities requires that companies look across a wide set of possibilities, including geographic and vertical market expansion, customer acquisition strategies, new product development, and mergers and acquisitions, to start.

Srinivasan points to market adjacencies as one of the top growth opportunities for many companies; utilizing a company’s existing technology and capabilities by transferring them to new markets can drive substantial growth.

Another key growth driver is understanding and exploiting the convergence of technologies and markets, Srinivasan notes, “Some of the greatest opportunities are coming at the point of convergence. Look at how healthcare and IT are coming together to create a whole new digital health value proposition, or how automotive and IT are joining forces to create new opportunities.”

Growth innovation may not be so much a matter of creating new products or services as it is of developing new business models. Today’s markets are replete with examples of companies that have realized phenomenal growth through the invention of new business models. Shared economy companies like Airbnb, Uber, and Lyft are well-understood examples. Srinivasan believes that shared-mobility models, the shift towards increasing vehicle utilization via real-time access on an as-needed basis, will continue to disrupt and transform the automotive industry. Higher education is also ripe for disruption, he adds, spurred by new Internet-enabled models that will expand access and bring down costs.

“There is an absolute need today for companies to look beyond their current state and explore where and how new opportunities or trends will reshape their industries, and, more so, how they can leverage those changes to grow. You have to look beyond the obvious. That’s really where a lot of our work comes into play, ” Srinivasan comments.

“We’re creating visibility into change, which every company needs before it begins the process of analyzing and implementing strategy, he points out. “The big question is: Are you analyzing and implementing the right strategies; are you guarding against the next wave of disruption that can potentially make your business irrelevant?”