Overcoming Inertia

 

In Part 2 - Overcoming Inertia - Section 3 - Laying the Foundation – the Authors begin to prescribe steps to solidify your horizons. First, it’s all about earning the right to grow. If your Horizon 1 isn’t healthy you have to focus on building a solid foundation of operation excellence, competitive strength, and sustainable cash flow.

 

To earn the right to grow the Authors emphasize that a company must achieve superior operating performance, sell any distracting or underperforming businesses and build the confidence of the investors in the company. They then give examples and prescribe solution for each condition described in Part 1.

 

In summary, the Authors indicate that while the foundation is being laid or stabilized managers must also turn their attention to identifying growth opportunities.

 

In Part 2 – Overcoming Inertia – Section 4 – Searching for Opportunities - the Authors provide an overview of their methodology developing several different options for growth. To this end they developed a tool that they call the “seven degrees of freedom.” They emphasize that by systematically addressing each degree of freedom in turn, the managers of your company can learn to think more broadly about growth opportunities in their businesses.

 

The seven degrees of freedom are based upon variables that describe the directions in which growth can be pursued. These are the customers served; products and services provided; the system for delivering them to customers; the geography in which business takes place and the current industry structure.

 

 

The Seven Degrees of Freedom are described as follows:

 

1. Existing products to Existing Customers

 

2. New Customers

 

3. New Product and Services

 

4. New Delivery Approaches

 

5. New Geographies

 

6. New Industry Structure

 

7. New Competitive Arenas

 

Then, in the rest of this section the Authors focused on driving results from several questions posed around each of the seven degrees of freedom such as the following:

 

1. How could your company increase sales to the same customers with the same product mix?

 

2. How could your company extend the business by selling existing product to new customers?

 

3. How could you grow by introducing new products and services?

 

4. How could you expand sales by developing better delivery systems for customers?

 

5. How and where should you expand into new geographies?

 

6. How much could you grow by changing the industry structure through acquisitions or alliances?

 

7. What opportunities are there outside your companies existing boundaries?

 

In summary, the Authors attempt to expand the search for new growth opportunities and provide the necessary methodology for drilling down until a number of promising paths are discovered. They emphasize that its not just the breadth of involvement that matters, but the breadth of the search.