Welcome to the first in a series of posts in which I’ll look at what makes companies genuine high-performance businesses, and discuss why so many fail to make the grade. Are enduringly successful companies simply in the right place at the right time? Can it really just be a matter of luck or is there more to it than that? Accenture has explored this topic in detail over the years, and we’ve identified a number of traits that we believe distinguish the winners from the also-rans of the business world.

So how do a select group of companies outperform their peers over a sustained period? And how do they manage to consistently grow both revenues and profitability, even during economic downturns and market disruptions? Is it down to the business ‘excellence’ that was the focus of so much business literature in the latter part of the 20th century, or is it the ‘greatness’ that everybody was talking about in the early part of the last decade? In 2003, Accenture embarked on a major research project to find out what really sets these companies apart. Over the past eight years, we have looked at over 800 companies across dozens of industries and going back decades. What we found is that truly great companies get to the top and stay there by accomplishing the one thing that evades the majority of companies: they jump the S-Curve of business performance.

S-Curve

So what is this S-Curve? Essentially, it is the pattern of revenue growth common to all (initially) successful companies. They start small with a good product and a small but eager client base; revenues grow rapidly as demand swells and eventually peaks and levels off as the market matures. That is the end of most businesses. Our research, explored in more detail in the book “Jumping the S-Curve” by Accenture’s Paul Nunes and Tim Breene, shows that once companies hit a revenue peak – a stall – they rarely ever return to rapid growth.

So how do the genuine high-performers avoid stalling? By moving on. Before they reach the top of one S-Curve, they’re already preparing to jump to the start of the next S-Curve. They make the leap to another successful business, and they do this repeatedly. What this amounts to is not simple greatness, but recurring greatness – the ability to achieve greatness repeatedly. These companies are able to create whole new playing fields, with themselves as the leading players. This may sound simple, yet why did such a small percentage of the 800 companies Accenture looked at achieve this jump? Or, why did the vast majority fail to jump the S-Curve?

One of the secrets lies in understanding three hidden S-Curves: the competition, capabilities and talent curves, all of which mature and decline much faster than a company’s financial performance. What they are, in fact, is an early warning system, signalling the time to prepare for the jump to the next S-Curve. What this boils down to is that high-performance businesses manage four S-Curves simultaneously. And they pull off this balancing act by creating an edge-centric strategy. They make a strategy a permanent process, rather than a one-off event. These companies also refresh their leadership well before it is necessary, and they make themselves hothouses of talent, ensuring they have the talent needed to drive the next growth spurt, or the climb up the next S-Curve.

Does this sound like your company? Answering two simple questions should give you an idea of whether your company is a true High-Performance Business.

1. Where is your company on the current S-Curve?
2. Is your company prepared or preparing for the jump to the next S-Curve?