Breakthrough Ideas for Growth – how to reach longterm success?

Yesterday there was IMD alumni club meeting hosted by Fonecta with interesting panel discussion. Panel was chaired by Professor Seán Meehan from International institute for Management Development. The panelists were Kimmo Alkio from Tieto, Timo Hiltunen from Fonecta and Harri Kerminen from Finnpro. They were addressing the topic of creating growth from perspective of their companies.

Professor   Seán Meehan

The definition of success introduced by professor Meehan was combination of sustained profitability and sustained growth. This approach to success has been studied for period of 1990-2004 by Professors Bala Chakravarthy and Peter Lorange.

The key finding here is that surpisingly small amount of companies (out of 6000 large public companies examined) survive in battle for growth over period of time so that they can achieve both growth and profitability at the same time. When talking about period of 15 years only 1% survive to stay in this category.

The panelist’s common theme seem to be need for transformation. Their old business models were about to become obsolete and they had to reinvent the whole company.

Kimmo Alkio

Medicine offered by Tieto’s Kimmo Alkio was environment where innovations created by clever individuals could take place. His example was a services, which was originally introduced by an architect. This service is to be developed into one of key assets supporting Tieto’s transformation in current heavy competition. Separating innovation from daily business could be good idea. This will give the idea an opportunity to grow a bit and be more prepared to be challenged by the existing business models and processes.

Harri Kerminen

Harri Kerminen had strong view point about using consultants. He would rather prefer to use internal skills instead. That could be good if you have enough bright and free minds inside corporation. With “free” I mean free from mentality “this is how we have always done” and brave enough to challenge the old habits.

Timo Hiltunen

Timo Hiltunen presented the growth story of Fonecta. 10 years of profitable growth in row, year by year. Now company has to reinvent itself as market and customer preferences have changed. Over the few previous years Fonecta has already success fully moved its focal point from old yellow pages business to new domains. Change is still continuing. He empahasized capability to renew all key elements of company at the same time capabilities of people, strategy and approach to market.

Leadership, strategy and go to market were also summarized by Professor Meehan as key areas where to look while steering a company towards success. He also pointed out that as business mature its’ market relevance, distinctive capabilities and talent development tend to be declining much faster than actual financial performance of company.

All in all really mind opening discussion. There is some food for thought while thinking how to maintain companies in the path of continuous success.

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