A few months ago this headline appeared in the Daily Telegraph and I have referred to it a couple of times (here and here). The issue is that a headline is eyecatching, attention-grabbing but ultimately by itself doesn't galvanise action. After all we are still here, aren't we? Well some of aren't, and some of us are struggling to achieve robust growth from a stream of competitive new products and services. On the business pages In the Independent today there are two adjacent headlines highlighting the annual results for Unilever and Reckitt Benckiser.
They are similar sized companies with a great deal of overlap in the marketspace, but one is struggling to achieve reasonable growth whilst the other is delivering very good results year after year (over the past seven!) and the financial gurus sees no reason to doubt Reckitt's future growth.
Innovation and an acquisition have been the key driver for Reckitts
Leading to topline growth:
Now it is said you cannot cost-cut your way to greatness so it is worth remembering that it seems easier to rationally analyse the potential returns from cutting whereas the returns from substantail or radical innovation are difficult to forecast. But when you run out of things to cut it is too late to do anything about it.
We can think of revenue growth as coming from:
Where we can, or at least think we can apply, rational thinking to the bottom-line and non-rational to the top. I once worked for an American called Nick who summed up the exposure to risks associated with each by saying that, "when senior execs meet on the 19th hole after a round of golf, it is better to be able to say "I've reduced overheads today by signing off the closure of another two factories." rather than " I've signed off on three ideas today!"."
There is also a lot more creativity needed to cope with non-linear outcomes. In reality the story of the two companies is quite complex, but it seems that one chief exec talks about bottom line stuff and the other about topline, which must send a message to the staff of their respective organisations. They both have great marketing teams and I guess one has the edge in terms of awards for them. But one has a good innovation stream offering perceptible value to the consumer to back up the brand promise. Perhaps one is worrying about the bottom line and the other is avoiding costs where it can and exploiting opportunity in a structured way.... interesting to see how culture affects the execution of similar data.
I guess the message here is that creativity needs to be set free to roam the corridors of influence in the organisation. Confining it to the zoo's called advertising agencies can be limiting as they only have their own world-view
(incidently there is a much more upbeat interpretation of Unilever in the Daily Telegraph).