Every organization must serve its customers, manage its cash effectively, use its assets wisely, and constantly improve and grow.
Having not received a single minute of formal business education, I read this book as a starting point for learning about general business practices.
My main takeaway was Charan’s definition of growth:
Companies that thrive over the long run grow both the top and bottom lines consistently over time. They do it through good growth that is profitable, organic, differentiated, and sustainable.
Profitable growth is capital efficient. It earns more money than one could receive by investing in something safe like bonds or a treasury bill.
Organic growth naturally flows out of what the company is already doing, which is both efficient and reinforces the organization’s creativity.
Differentiated growth means providing a product or service that is not a commodity. Customers must prefer it.
Sustainable growth does not mean just a quick spike in revenues but leads to continued increases year after year.