The book that I read ‘Every Business is a growth business’

Vanakkam 2011<DOT>!!

• I say very ‘happy new year’ to our friends A.Raja, Kalmadi, Lalit Modi, Nira Radia because of whom we had JALSA WITH SOME JILPA in 2010.
• I say even ENTHIRAN did not entertain us to the level these people entertained us. More the budget more entertaining it was.
• I say All dese kame to light bcause GOD Arnab Goswami only knows.
• I wish every one a happy and prosperous new year and lets hope for a clean and green 2011.

Guys!! herewith,  I have decided to share whatever I learn and whatever book I read, in this blog. So in this post I would share about what I learnt from reading the book ‘Every business is a growth business‘.

Before diving into dat, let me tell how I picked this book. While shopping for book, I made up ma mind to pick a Harvard review book and this book’s front cover looked as same as harvard review book. Without giving any second thought I picked it. Reaching home I saw that this book was not by published by harvard review and was quiet disappointed. But anyway I started reading it…………………………… And here I am gonna share WHAT I LEARN’T FROM IT AND NOT REVIEW IT . But, anyway I thoroughly enjoyed reading this book. Here we go……………………….

The book starts by illustrating a business turn around that happened in Coca-Cola. The company Coca-Cola was in bad shape as the US soft drink market became mature and further growth became impossible. And the game was to gain a percent of market share by reducing the cost which affected the profit. It was in this condition a new CEO Roberto Goizueta took over the reins of Coca-Cola. What Roberto Goizueta saw was that the seniour managers in Coca Cola were too much focused on the question of ‘WHAT IS OUR MARKET SHARE OF US COLA MARKET?‘ and were butting their heads to gain few percent of market share. Seeing this Goizueta asked them what is the average per capita consumption of fluids by worlds 1.4 billion people? 64 ounces came the reply. Then he asked them what is the daily per capita consumtion of Coca-Cola? Less than 2 ouncess came the reply. And finally he asked them ‘WHAT IS MARKET SHARE OF THE STOMACH?‘. This completely changed the psychology of the people in Coca-Cola. They stopped worrying about loosing more market share and instead focussed on winning more market. This illustration clearly sets the tone of the book ‘Every business is a growth business.’

But my question is, Is all growth good growth? Because I know about the Subhiksha story. In 2007 they had approximately 300 shops across India. And in the end of 2008 they increased it to 700 and they where retailing everything under the sun from mobiles to flowers. It grew without any focus and grew out of its pocket which resulted in the closing down of the company. Also there is a very famous saying in the business world that ‘ GM makes everything under the sun, but it dosent make money ‘. So, now how should the growth must be. Here in this book Ram charan explains that a company that focuses on growth growth growth eventually fails. The focus should be on Liquidity, Profitability and Growth. And there are two essential things for successful growth.

• Good corporate value system
• Operational excellence.

Without these two one should never think about growth. Good growth is profitable and sustainable whereas bad growth is profitless, wasteful of capital and even reckless. The book then explains on how growth should be be acheived. To achieve Growth there are two important things.

• Leader
• Strategy

LEADER

Growth is mentally created by company’s leadership. In the above Coca-Cola case study one could find that, it was Goizueta who beleived and initiated the growth. Book explains that Good leaders posses their own teachable point of view like Goizueta’s market share of the stomach. The teachable point of view must posses 1. Ideas 2. Values 3. Emotional Energy and 4. Edge.

STRATERGY

After this comes the strategy for growth. Growth is a creative game. Growth requires curiosity, imagination, and emotional energy. Being so, if people lock themselves up in a room and come up with innovative products 9 out of 10 time its gonna fail. Growth has to be outside in and not inside out. A sustainable growth strategy starts with understanding the difference between what you make and what people need. And this is what often tends NOT to be the same thing.

Towards the end of the book, Ram Charan provides various tools to strategize and execute growth.

In short this is what d book says :

 1. There is no such thing as a mature business
 2. Not all growth is good
 3. Growth is mentally created by company's leadership
 4. Balanced growth is the key to prosperity
 5. Growing is less risky than not growing

I learnt from dis book that profits can be increased easily through GROWTH than through cost cutting.