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Wednesday, September 24, 2014

Indian organizations need to get "Fit for Growth" says PwC Strategy& study

As per the study, only 3% of Indian companies are really "ready for growth" 

Despite winning strategies, majority of Indian organizations are not ready for growth. As per the study titled "Why Indian companies need to get Fit for Growth and what you can do" by PwC Strategy&, nearly 80% of surveyed organizations fall short of realizing their growth potential as a result of being "strategically adrift", "distracted" or "capability constrained". In fact, more than 60% were found to be in the "distracted" category, indicating a high degree of mismatch between strategy and execution. With the Indian economy beginning to bounce back, the time is now right for these organizations to get "Fit for Growth" by investing in building scale and achieving the next level of growth. 

Bharti Gupta Ramola, Leader Markets, PwC India said, "The long economic slowdown led many organizations to adopt a reactive approach, often resulting in strategic misalignment. As organizations get back on track and refocus on growth, they will need to focus on three critical building blocks – structured corporate planning, robust cost structure and strong risk & governance mechanisms. We therefore see CFOs playing a pivotal role in driving organizational growth." 

The global story is not too different, with only 13% of over 200 surveyed organizations reporting high Fit for Growth scores. A strong correlation exists between the Fit for Growth score and company performance, demonstrating that organizations with high scores also generate premium returns. 

Jai Sinha, Managing Director, PwC Strategy& India says, "In our experience, while organizations would rarely disagree that robust strategies, solid cost management and powerful organizations are critical to performance, few of them are masters in integrating all three elements which together form the foundation for a winning organization. Our Fit for Growth approach evaluates companies on these very parameters, providing leadership teams with a set of guidelines on which to chart out their growth plan and can be directly correlated with market performance." 

As per the study only 3% of Indian companies are really "ready for growth". Others must look to overcome specific challenges to future-proof themselves – a "strategically adrift" organization for instance should look to re-craft its corporate strategy and align it with core capabilities, a "distracted" organization must operationalise its strategy by channeling resources towards core activities, a "capability constrained" organization should review its operating model, organization structure, processes, systems to become world-class and an organization "in the game" must clear the last mile by creating a performance-centric culture, with strong risk & governance mechanisms.
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