Steps to Delivering Profitable Growth

Boosting profitable growth is a key challenge for the chemicals industry.

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Boosting profitable growth is a key challenge for the chemicals industry.

According to Roland Berger, a consulting firm, only 23 percent of 142 surveyed chemical companies delivered profitable growth between 2012 and 2015.

“Sales are stagnating,” says Jonathon Wright, a partner with Roland Berger.

Wright says part of the slowdown in sales has to do with the push towards higher efficiency and companies looking to use and purchase fewer materials.

Yet, shareholders are still looking for companies to deliver growth every year. This pressure is encouraging many in the chemicals industry to seek mergers and acquisitions for a jolt of growth. But Roland Berger has other ideas.

In a recent series of report, Roland Berger put together useful steps for improving your company’s growth potential. Part one of the series, “Know Thyself: Delivering Profitable Growth — The Elusive Frontier,” hones in on a simple but often overlooked process of self evaluation companies can use.   

The basic outline includes four areas employees should examine including internal competencies such as fundamental knowledge and physical capabilities; and external competencies such as market translation and market knowledge.

By working through the steps, Wright says companies and their employees will have a better understanding of what unique capabilities they have and where in the market the company should target its efforts. The report also includes ways to maintain that competitive advantage over the long term.

In addition, Wright says by engaging in the process, employees have a better sense of how they contribute to the company’s goals.

“One of the key things is letting people know how their contribution is part of the whole,” Wright says. “Does someone in an R&D lab understand his potential to change the competitive advantage of the business?”

Click here to see Roland Berger’s full report and their tips for delivering profitable growth.

 

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