When the average person thinks "big corporation," the images that spring to mind are primarily negative: CEOs who jet around in luxury while workers barely scrape by, backdated stock options, huge mergers that spawn big bonuses for executives but layoffs for lower-level workers, and so on. Hess prefers to dwell on the positive: he studies companies that thrive via positive, healthy, organic growth—by growing their customer base, creating new products, and mastering operational efficiency—without resorting to accounting manipulations or devaluing their employees."Intrigued by the financial scandals of recent history, I researched how many companies succeed by generating earnings primarily through organic growth," says Hess, author of the new book (Mc Graw-Hill, 2007)."I found that in three separate studies of over 800 value-creating public companies, only 22 of them—less than 4 percent—consistently created substantial economic value and out-competed their industry competition primarily by growing internally or organically." Surprised at the staggeringly low number of companies growing organically, Hess was motivated to find out exactly how the 22 high-performance organic growth companies could do it so well. "What I found surprising about the results was what required to grow a business organically," says Hess.
Hess outlines six areas in which many of the 22 companies he profiled excel. Companies that grow organically have a simple, easy-to-understand strategy and business model that can be easily explained to and understood by employees at any level. Big innovations and new business models are not prevalent.
He calls them the “Six Keys to Organic Growth,” and he supports his findings with detailed case studies of seven of the 22 high-performance organic growth companies from his study—SYSCO, Stryker, Outback Steakhouse, Best Buy, TSYS, Tiffany & Co., and American Eagle. Examples of these elevator pitches are: Best Buy: Best Buy sells and services branded customer electronics, appliances, home office equipment, and entertainment products.
Harley-Davidson: Harley-Davidson manufactures and sells motorcycles, motorcycle parts, and related apparel and accessories.
SYSCO: SYSCO sells food and restaurant-related products and services to food service establishments.
Tiffany & Company: Tiffany designs, manufactures, and sells fine jewelry and luxury goods.
"With simplicity comes employee understanding and engagement, because employees know where the company is headed, how it will get there, and what their individual roles are in that growth," says Hess.
"Each person understands why his job is important and how it fits into the big picture. Instill a "small company soul" into a "big company body." A small company soul is entrepreneurial.
Employees have a sense of ownership of the customer, are held accountable for results, and share in the rewards of those results.
Entrepreneurial employees are energized and engaged in the day-to-day business because they feel they have some control over their destiny.
They enjoy autonomy and respect and they feel rewarded for their efforts.
"SYSCO, the largest wholesale food distribution business in the United States, SYSCO has infused its employees—from truck drivers to salespeople—with a sense of ownership,” says Hess.