Efficient Growth

How to Drive Top-Line and Bottom-Line Business Growth Simultaneously

Consistent Growth
Is Elusive

Despite flat revenue performance and budget expectations, increasing regulatory changes, and investor activism, the CFO's top mandate today is sustained business revenue and margin growth. This means allocating resources in the most efficient manner to support mature and emerging businesses, as well as innovation bets.

Yet only 10% of companies have consistently achieved simultaneous top- and bottom-line growth. How have those companies succeeded in making resource allocation decisions that support both current and future company growth potential?

Efficient Growth is about profitable growth, ensuring a balance between short-term growth and long-term investments.

Alban de Vatteville
FP&A Leader
Nielsen

What Is Efficient Growth?

"Efficient Growth" is sustained, long-term revenue growth with simultaneous margin improvement. Companies that accomplish efficient growth receive an annual shareholder premium of 7.05%, and see the largest premium paid by investors during a "peak".

Over the past 20 years, only 60 companies across the Fortune 1000 and S&P Euro 350 had consistent year-over-year revenue and margin improvement and long-term growth that exceeded their industry peers.

Finance: The Unexpected Obstacle to Business Growth

Four Keys to
Business Growth

The best finance leaders focus on making better capital allocation and investment decisions, while also cutting the right costs. In slow growth periods, these leaders do four things differently:

  1. Allocate capital to bigger, riskier growth bets and innovation
  2. Focus on managing businesses for asset efficiency, not just profit and loss performance
  3. Scrutinize acquisition and partnership opportunities
  4. Communicate with investors effectively

Efficient Growth
Assessment

Efficient Growth Leaders consistently identify and allocate capital to bigger, riskier growth bets than their peers. However, some of the key findings from our 2016 risk and growth analytics survey were:

  1. Finance leaders are seen as more risk averse than their business leadership colleagues
  2. On average, companies have a 50-50 split on capex allocated to growth versus maintenance investments
  3. Most companies have potential to harm their ability to pursue transformational growth projects through processes or policies

We help finance organizations to benchmark their approach and upgrade processes in line with Efficient Growth Leaders.

Create the Conditions
for Business Growth

The secret to business growth is not operational efficiency, but rather bigger, more focused growth bets. Sadly, the finance function has made this harder by creating growth anchors: hurdles that are intended to reduce risk, but which stifle initiatives with the potential to feed business growth.

By removing harmful growth anchors and establishing growth ladders to help initiatives flourish, finance leaders can help put their companies on the path to business growth.

How M&A Supports
Business Growth

Our analysis of 3,000+ deals over 15 years shows that the approach to mergers and acquisitions taken by companies with high business growth differs from that of their peers in five key ways::

  1. Average deal size
  2. Mix of deal types
  3. Consistency of deal-making across the business cycle
  4. Frequency of divestiture
  5. Extent to which they impair goodwill

Business Growth Amid
Economic Uncertainty

Amid economic uncertainty, leading CFOs take five steps to drive top- and bottom-line business growth:

  1. Kill underperforming projects based on principled criteria
  2. Develop a new theory of the customer’s changing preferences
  3. Based metrics/KPIs in operational and capital efficiency
  4. Identify and protect key revenue-driving expenses
  5. Cultivate innovation by running pilots in key segments

The Product

Use our solution to drive business growth at your organization.

CEB Finance Leadership
Council — Integrated

To solve lots of challenges—financial markets, volatility, uncertain growth projects, a greater demand for financial guidance, increased compliance pressure, heightened investor expectations, and flat budgets—you need perspective and expertise from lots of Finance leaders. CEB Finance Leadership Council – Integrated brings together the best insights, benchmarks, guidance and tools for Finance Operations, Accounting, FP&A, Tax, and Investor Relations.

Decision Making Resources

Whitepaper

The New Finance Mandate: Efficient Growth

Four steps Finance teams must take to help the business make better investments and drive business growth.

Checklist

Preparing for an
Economic Slowdown

Key questions the executive committee should ask to assess readiness for a slowdown.

Guidebook

Capital Allocation:
Dos & Don’ts

Seven mistakes to avoid and seven tactics for better capital allocation during periods of slow revenue growth.

Unlock These
Resources Now

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Meet the Experts

Meet the team behind our growth strategy tools.

Tim Raiswell

Finance Research Leader
 

Read Biography

Thomas Roberts

Finance Advisory Leader
 

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Johanna Robinson

Finance Product Leader
 

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Success Stories

success-stories-Finance-DelicatoFamilyVineyardsLLC-IanSwanson

Delicato Family Vineyards used our resources to build and develop their finance team.

success-stories-Finance-HanesbrandsInc-AllisonNorton-Rimron

Hanesbrands used our support to benchmark and grow their finance team.

Success Story: Pret a Manger, Adam Jones

Pret A Manger used us to expand into global markets.

Case Study

Lastar was able to identify opportunities to cut costs and enable more productive conversations about funding future growth plans.

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