At most large companies, of course, there isn’t just one growth strategy. Rather, companies rely on a diversity of approaches that vary by business segment and by circumstance: at times executives might place more weight on acquisitions, while at others they focus on stealing share from competitors, for example. Our analysis shows that high growth rates for these different strategies are associated with excellence in a range of leadership skills wielded by managers at various levels of the organization.

Consider portfolio momentum growth, which flows from market growth across a company’s existing business segments. To drive this type of growth, senior managers beyond the top team typically need to execute a strategy effectively across often far-flung organizations. Senior managers at companies in the top quartile of this growth category were highly rated in competencies relating to dynamic people and organizational leadership: developing organizational capability, change leadership, and team leadership.

By contrast, companies in the top quartile of M&A-driven revenue growth had top-leadership teams that excelled at a broad range of skills. The first is market insight—in other words, looking beyond a company’s current business landscape to discern future growth opportunities. That competency no doubt supports the identification of deals, while another competency crucial for M&A-driven growth—a well-honed orientation toward achieving results—helps in postmerger integration.

In short, to achieve stronger growth, companies must not only assemble a critical mass of talent, which will require attracting and retaining an “unfair” share of excellent leaders, but also align these leaders’ roles and skills with the companies’ growth strategies. In our experience, the best companies conduct detailed assessments of the talent required—across the organization and by business unit and geography. They then create clear leadership-development targets for executives and managers and incorporate these targets into performance-management, recruitment, succession, and reward processes. In this way, top companies systematically build excellent leaders with the skills needed to drive growth.

Comment