Revenue growth: Perception or reality?
February 22, 2018
February 22, 2018
Optimism is good (if tethered to reality).
Eighty-one percent of business leaders are confident they will achieve their 2020 projected growth rates. Even more—85 percent—believe their organizations will grow revenue by 5 percent or more. The optimism is admirable. But it is not realistic. After all, GDP growth for advanced economies barely exceeds 2 percent.
By our estimates, half of our survey respondents are in for a rude awakening. On the positive side, that means half are on course to achieve the revenue growth they have envisioned.
Infographic: revenue growth data at a glance
When business leaders were asked if they are confident they will achieve their 2020 projected growth rates, 25% said extremely confident, 56% said confident, 18% said somewhat confident, and 1% said not confident.
View the infographicOne of the main reasons executives are so bullish on their growth prospects is that they are largely blind to the threats that could potentially undermine their business and operating models.
In reality, almost all companies are vulnerable to some disruptive threats. It’s hard to imagine company leaders unconcerned about emerging competitors, operational complexity or evolving customer behaviors.
The good news is that more than half (56 percent) of leaders admit they are at risk, even if they perceive that risk to be low. To address the threats they face, a number of leaders are fighting fire with fire. They are using the growth disruptors that pose the greatest threats—such as advances in mobility and technology or changing regulations—to their advantage by investing in them to stage a bit of disruption of their own. This is a wise move. But here, too, there’s a problem. Half of our respondents admitted they weren’t investing enough.
Getting real is a prerequisite for getting revenue.
Our survey revealed notable differences between leaders who are preparing for disruption and growth, and those who are not. Their vulnerability to threats and their identified sources of future growth further distinguished our survey respondents. Their beliefs and actions allowed us to align companies to one of three archetypes.
Wayward Pessimists
Struggling Realists
Preparing Pragmatists
Every archetype can take steps to unlock additional revenue in the years ahead. Wayward Pessimists arguably have the heaviest lift. But even the Preparing Pragmatists, whom we believe are most on track to achieve their growth objectives, have work to do to shore up their competitive advantage.
While all companies would benefit from tempering their optimism, different archetypes will need to focus on different things to achieve the growth they envision.
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