Redefining Growth

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Who are they; what are they doing; and how many of these exceptional revenue growth companies are there?

Growth During Recessions

Revenue-growth companies are all around us. Utilizing Standard & Poor's Compustat Database, I have identified more than 400 public-revenue growth companies with revenues ranging from $50 million to $10 billion that are achieving a two-year annual revenue growth rate averaging in excess of 20%. Despite the economic meltdown in the latter part of 2008, America's best management teams are achieving revenue growth in top industries such as energy, capital goods, software and services, health care equipment and services, pharmaceuticals, biotechnology and life sciences, technology hardware and equipment, consumer services, diversified financials, materials, and commercial services and supplies. This contrasts with historic growth (1980-2007) in specialty retail, technology, and financial services as the top economic sectors for the greatest number of growth companies.

America's exceptional growth companies actually have a consistent track record of growing through recessions. While the list changes, what is in common is that companies do achieve growth during the toughest of times. During the 1993 recession, Cisco, Cadence Design, and Cracker Barrel Restaurants (CBRL), which averaged revenues of $500 million, continued to achieve revenue growth. Since this recessionary period, Cadence Design and Cracker Barrel are billion-dollar-plus companies with Cisco growing to a stellar $36 billion in revenue. Cerner (CERN) and Endo Pharmaceuticals (ENDP), leading health-care software and pain medication providers, serve as proof that companies can grow through this most recent recession along with companies like Green Mountain Coffee (GMCR), Middleby (MIDD), Deckers Outdoors (DECK), and Intuitive Surgical (ISRG). Even during recessions or slow-growth economic cycles, there are still growth market segments.

Jack Welch, while leading General Electric (GE), declared that each of GE's business units should be No. 1 or No. 2 in their respective markets. Our high-revenue growth companies are No. 1, No. 2, or No. 3 for revenue growth in their industry or market. By focusing on increasing revenue per customer and number of customers, your company will become the fastest-growth company in your market.

Time-Tested Practices

What are America's recession-proof, highest-growth companies doing differently? What are the values, fundamentals, and actions that will make the difference between failure or just surviving, and thriving?

The answer to these questions is what I call "The 7 Essentials." After years of research and scores of interviews, in-depth financial analysis, some earnest listening combined with problem-solving and synthesis, I identified a unique set of time-tested management practices for achieving sustainable and enduring growth.

Utilizing a mostly quantitative approach to analyzing growth, I set out to derive the difference-making fundamental and management insights common across and unique to America's highest-growth companies—with a particular focus on growing through recessionary/recovery periods.

Redefining the Blueprint for Growth

Yes, it is possible to achieve exceptional growth through challenging times; the numbers prove it. Applying the values and fundamentals of America's highest-growth businesses—the unique set that has grown through recessionary and recovery periods, especially the 2001-2003 and the 2007-2009 recessions—will be essential for your company to not only survive…but thrive.

What is unique about The 7 Essentials? Every company focuses on a market, has customers, tries to be profitable and has a management team. What makes the growth difference between a struggling company from an exceptional-growth one is the unique combination of what they do and how they do it. For example, every company has customers but I found that few have customers who sell for them and even fewer have customer advisory boards that offer advice on how to best grow to meet new customer needs.

Each subsequent column will highlight an aspect of exponential growth that I hope will redefine the framework—what I call the blueprint—for growth and the actions you can take. The next seven columns will focus on each one of the essentials so that you can turn these exceptional growth insights into actions! The next article will focus on creating and sustaining an exceptional value proposition. If you want to to measure your company's performance against each of The 7 Essentials, go to the free scorecard at http://scorecard.blueprintgrowth.com/.

David G. Thomson is the author of the bestseller Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth as well as a business advisor and keynote speaker. His next books, scheduled for publication in early 2010, are Mastering the 7 Essentials of High Growth Companies and The Next 800 Companies to Lead America's Growth

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