Organic Growth for companies. Most of our Singapore’s small medium enterprises grow organically despite the introduction of much Merger & Acquisition support from the Singapore government such as M&A Tax Allowance (which was enhanced following the 2015 Budget) . In challenging times, even larger companies may still want to conserve cash to be invested internally rather than go on an M&A ‘spree’ – that is if they believe that they will be able to emerge larger after the temporary downturn.
To the end of doing the tough stuff called sticking to organic growth, McKinsey has a couple of pretty good questions to ask oneself when planning strategically for value creation along short to long-term timescale.
- How balanced is our portfolio? If we take our portfolio of growth and innovation initiatives and plot them against NOW NEW NEXT, how balanced does the distribution look? Do we have a perspective on which of the six “growth plays” would be successful in our business?
- Who is thinking about disruption? Are we as systematic in NEXT as we are in NOW? Is anyone tasked with disrupting our core business—or are we leaving it up to competitors? What are we doing to explore additive business models?
- Are we limiting our horizons? In exploring NEW opportunities, do we impose limiting mind-sets on how we define consumers, our category, or the addressable channels?
- Do we use advantaged insights? Do we rely on the same data and insights as our competitors—or do we have a source of distinctiveness?
- Are we agile enough? Have we been able to accelerate our time-to-consumer and time-to-market? Or are we still stuck with cumbersome and slow innovation processes?
Ultimately, these questions may also start leading companies to consider acquisition in the mid to long term horizon where threat of disruption may force even very niche companies to place some hedging bets through incubation of related peripheral technologies.