How a Growth Gap can Sneak Up On You

This article was co-developed with Alex van Putten, Partner at Cameron and Associates, and draws from our 2017 article “How to Set More Realistic Growth Targets.”

It’s always easy to project rosy growth goals that will happen in some misty future. The trouble is that you need to be making hard decisions today about appropriately resourcing those growth ambitions.

OK, strategists, let’s talk about growth gaps. A growth gap is the difference between what your base business and any new business you might be developing will deliver, and what your strategic ambitions are. This rather charming explainer video from our buddies at Innosight lays it out. Most organizations are thunderingly bad at taking the kind of action that would not leave them with a growth gap.

We are perennially unrealistic about the future

There are a lot of reasons. The planning fallacy, a concept proposed by Daniel Kahneman and Amos Tversky in 1979, suggests that people always under-estimate the time and the cost it will take to do just about anything. Few executives have the discipline to realistically evaluate their sources of growth. And very few organizations, in our experience, have a disciplined way of managing their portfolios of investments. So what happens is that projects that are vaguely assumed to be able to deliver future growth are under-staffed (or not staffed at all) while zombie projects that everybody knows are going nowhere get to lumber along, sucking up talent and resources along the…