As we enter into fourth quarter and begin planning for next year, some companies will try and cut their way to growth by reducing expenses, staff and overall resources as much as possible. This is certainly one approach, but many board members and senior leadership teams have started to shift their focus toward other profitable growth strategies.
There are three fundamental attributes of organizational growth that leadership teams are contemplating: the gradient or slope of growth, the torque or speed of growth, and the fuel efficiency or profitability of growth. Strategic relationships—often thought of as a soft asset—affect each of these attributes and thus the organization’s overall growth strategies.
Most organizations clearly understand hard assets such as inventory and real estate and often characterize them as a barometer by which the company’s financial stability and capacity for leverage are measured.
Soft assets are characterized as intangible and tend to be more nebulous. In recent years savvy organizations have identified and accounted for their unique and inherent value. They include such line items as brand equity, human capital, and strategic relationships, perhaps identified as alliances, joint ventures, or long-term customer or supplier contracts. Although they may not appear in most financial reports, they are proving to be unique, sustainable competitive differentiators and a certain barrier to entry for others.
Are you fueling or hindering growth?
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