Accelerating growth is on every CEO’s agenda. Each year business leaders commit to an overall revenue growth target, but the reality is that growth within a business is often very uneven. Some parts grow faster, and one hopes that they offset the other parts that may be declining. Dave Calhoun, former vice chair at General Electric and now senior managing director at Blackstone, says that it’s better to double down on your winners than to invest in fixing the losers. But many companies have a one-size-fits-all mindset toward metrics, which makes it hard to use that judgment when allocating resources from the top.
Why Companies Should Measure “Share of Growth,” Not Just Market Share
It tells you where an industry is going.
June 02, 2017
Summary.
Companies should shift their focus from market share to share of growth. Too often, market share relies on outdated definitions of markets and focuses on the past, rather than the future. Providing generous rewards to executives who exceed share of growth targets creates better incentives for driving breakthrough growth, and share of growth is a better key performance indicator to use when allocating investments.
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