Achieving growth when it seems impossible

Jan Sedlacek at Stryber explains a new way of thinking that holds great potential for helping businesses achieve profitable, sustainable growth

 

Growth is the lifeblood of every business. In fact, 62% of CEOs selected growth as their top business priority in 2024, according to a new survey by Gartner. Yet, in today’s turbulent economic climate - marked by political upheavals, a global cost-of-living crisis, and saturated markets, achieving growth can feel like chasing a mirage.

 

For many businesses, the instinct is to double down on what’s familiar: optimise operations, improve products, or execute mergers and buy similar businesses. The problem with these strategies? Down the line, they are focused on managing business as usual and delivering incremental improvements, not on driving growth.

 

We’ve all seen the all-too-familiar cycle of growth and stagnation that plagues many companies.

 

In the early days, growth comes easily for many. Hungry start-ups disrupt markets, attract investment, and steal market share from the incumbents. But as they mature, growth plateaus, and they adopt the slow-moving pace they once challenged. 

 

Mature markets become saturated, limiting growth opportunities, while complex governance slows decision-making and innovation. Many try to address this with dedicated innovation teams, but the reality often falls short of expectations.

 

In reality, large established businesses are remarkably resistant to internal change as their legacy operations, culture, and governance exert an almost inescapable gravitational pull toward their core business. So, what’s the alternative?

 

To break free from this cycle of business-as-usual which I refer to as “gravity”, business leaders must embrace a new way of thinking. Growth is not a linear journey, especially for mature organisations. It’s a multidimensional challenge that requires reframing.

 

Enter the Growth Spheres model. Backed by comprehensive research alongside 20 years’ experience in the corporate and start-up sectors, this framework is designed to help companies achieve sustainable growth through three key types of growth strategies: Core, Adjacent, and Detached.

 

The gravitational pull of the core organisation

For many organisations, their core business is at the heart of their operations. No surprise here; it’s what made them successful in the first place. Growth in this sphere focuses on leveraging what the business already excels at - sustaining innovation, improving existing products, or integrating acquisitions.

 

These strategies make sense for mature companies. Prominent examples include Apple introducing a new version of the iPhone or Coca-Cola acquiring Minute Maid, another beverage company.

 

But there’s a catch: Core growth quickly hits a cap. As markets mature and competition intensifies, incremental improvements fail to deliver the same returns. Consider this: during the ten years leading up to the pandemic, the average company grew at a mere 2.8% per year. Even M&A, one of the most popular Core strategies, has a failure rate of 70% to 90%, as most deals fail to achieve their intended synergies. 

 

Core strategies are essential for stability, but they cannot drive long-term growth. To escape stagnation, companies must look beyond their Core and explore adjacent growth strategies.

 

Adjacent growth: the sweet spot for transformation

Adjacent growth strategies offer a bridge between the familiarity of the Core and the uncertainty of uncharted territory. They focus on building or acquiring businesses that are not just “more of” the same core operations but are still close enough to leverage existing resources, capabilities, and market knowledge.

 

This approach allows businesses to diversify their offerings, tap into new markets, and create complementary revenue streams without abandoning their strengths. Research shows that companies pursuing Adjacent growth deliver 53% higher total shareholder returns than those focused solely on Core strategies.

 

Prominent examples include Amazon expanding into cloud computing with Amazon Web Services (AWS) or Swiss retailing giant Migros acquiring the market leading electronics e-commerce company to become the dominant e-commerce player in the market overall.

 

Or there is the example of a global food and beverage giant that ventured into Adjacent growth with a next-generation smart water dispenser. Initially, it struggled to find the right commercialisation path. But by conducting an exit readiness evaluation and the development of a comprehensive roadmap for securing the investment needed to take the venture to market, the FMCG venture secured millions in funding to drive further expansion and long-term growth. 

 

But making Adjacent strategies work isn’t easy. It’s a delicate balance. Move too far from the core, and you risk losing your competitive edge. Stay too close, and growth becomes impossible.

 

Detached growth: Don’t gamble

Detached growth strategies involve diversifying into entirely unrelated markets or industries. On paper, they seem almost too good to be true: enter an untapped market, gain a first-mover advantage, and create entirely new revenue streams.

 

However, the risks are significant. Without shared assets or synergies, Detached ventures often lack the foundation needed to succeed. This space is typically better suited for independent technology start-ups, free from the influence of incumbent players - even minority investments can act like strings pulling start-ups back toward the incumbent’s core.

 

The leaders most tempted by the promise of Detached growth are often those frustrated by the pull of the core. But success stories are rare. More often, these strategies lead to wasted resources, lost focus, and destroyed shareholder value, a penalty that investors refer to as the "Conglomerate Discount." For most organisations, Detached growth should remain a fringe option, reserved for the rarest cases, rather than a strategic priority. 

 

Breaking free from stagnation

As companies scale, their success can sometimes hold them back - layers of governance, risk aversion, and legacy operations often keep them tethered to the Core. Breaking free takes bold leadership and a willingness to embrace different governance models.

 

Take one of our clients, for instance. A large applied-research organisation with dozens of research centers. To better commercialise its R&D, it established a commercial-driven innovation approach. This pivot enabled venture projects in sustainability to secure pre-seed funding and gave the organisation the tools to turn breakthrough technologies into viable businesses.

 

Growth isn’t about randomly chasing new opportunities, nor is it driven by creative thinking or visionary inspiration alone - it’s about choosing the right strategies that align with your company’s objectives and strengths.

 

In a world where growth feels increasingly challenging, success comes from breaking free from what you’ve always done and how you’ve always done it. This means organising effectively to overcome the pull of gravity. It’s likely simpler than you think, but also harder than it seems.

 

---

 

Jan Sedlacek is Co-Founder and Managing Partner at Stryber

 

Main image courtesy of iStockPhoto.com and LaylaBird