​Written by Sven Smit, Mehrdad Baghai, and Patrick Viguerie, The Granularity of Growth: How to Identify the Sources of Growth and Drive Enduring Company Performance focuses on overcoming the challenges that big businesses face in engineering expansion in highly competitive environments.

Published in 2008, the book presents a seemingly intractable problem in the preface: a hypothetical median $25 billion revenue Fortune Global 500 corporation that needs to generate incremental annual growth of $1.6 billion, simply to stay current with average GDP growth of 6.2 percent. This requires orchestrating growth that exceeds the total annual revenue of many established global brands.

At the same time, established companies face challenges associated with longevity and maturing markets. As once innovative products and concepts become widely recognized and imitated, returns gradually diminish. Another issue is that larger companies tend to focus on operating metrics and shareholder expectations, rather than meeting consumer needs, which leaves them vulnerable to new business models and competition.

Two of the book’s authors were partners at the consulting firm McKinsey & Company, and they base many of their insights on quantitative studies of corporate growth. One research finding is that 80 percent of growth differences between major companies has to do with choices in market segments to compete in, and how much M&A activity to employ in expanding market reach.

Making effective choices here requires breaking down revenue growth performance into a trio of granular elements: inorganic activities (M&A), organic share gain, and portfolio momentum. Unfortunately, many analyses of sectors, industries, and megatrends are at such a high level that they fail to provide actionable insight.

The granular perspective enables companies to identify hidden pockets of growth, even within markets that are seemingly mature. Corporate leaders allocate resources with maximal efficiency, where they can best attain growth. With a granular blueprint in place, organizational structures are designed that match market textures, with global scale balanced by local responsiveness.

Another element of this matrix is envisioning growth trajectory as a long-term proposition and providing the capital, talent, and resources necessary to achieve ambitious goals. This approach avoids the trap of watching every emerging metric and missed target, and engaging in morale-deflating cost cutting with each setback. This approach requires seamlessly transitioning from granular analysis to macro-level planning that incorporates accurate forecasts and trend analysis. The successful organization “needs to reflect the texture of the market and the set of opportunities it presents.”

Another point of emphasis is that growth alone does not drive results. Profit and operating performance are also key, and there are two basic strategies here. One involves sustaining high growth while maintaining margins, as with Walmart or Target, when they add locations, while keeping prices and distribution channels intact. Another viable pathway involves aiming for moderate growth while improving margins, often through restructuring and selling off non-core assets. An example involves Coca-Cola selling off bottling plants to focus on its core markets and competencies.

The authors argue that M&A are an oft misunderstood engine of growth that typically contribute to around a third of revenue growth. Acquisitions fulfill a multifaceted role of consolidating industries and building bridges to new markets and industries. The emphasis of successful M&A is not simply on financial metrics, but cross-organizational synergies and strategic fit. Affected business units are involved in planning mergers from the outset. In addition, acquisitions are balanced by timely divestments that keep the overall corporate portfolio focused and on a unified track.

​Hudson Global Resources, a leading recruitment and human resources consulting firm, has transformed its management reporting capabilities across Australia and New Zealand through the implementation of a web-based strategic enterprise management system (SEMS). Powered by Microsoft SQL Server 2000 Analysis Services, the system provides real-time access to performance data across all levels of the organization.

Previously, Hudson’s 1,200 consultants in the region relied on a labor-intensive, paper-based reporting process to log their activities. These forms were manually compiled by finance staff into spreadsheets for performance evaluation and bonus calculation, a time-consuming process that delayed critical decision-making and tied up valuable resources.

Recognizing the inefficiency of this method, Hudson sought an automated solution that would streamline operations, improve data accuracy, and offer a clearer view of business performance. The company partnered with Microsoft Gold Certified partner MIS AG to design and implement SEMS. More than just a software upgrade, the project aimed to create an integrated business intelligence platform capable of turning raw data into strategic insight.

From an initial set of 300 key performance indicators (KPIs), Hudson narrowed its focus to the 20 most essential metrics. These KPIs were embedded into the new system, which was developed and rolled out in phases beginning in February 2003 and concluding in March 2004.

With SEMS fully operational by July 2003, Hudson managers and consultants gained the ability to view detailed performance dashboards updated on a daily, weekly, or monthly basis. The system automatically collects data from the firm’s customer relationship management platform, meaning every consultant interaction is recorded electronically and fed into a central data warehouse.

From there, SEMS generates up-to-date reports with a single click, dramatically reducing the time and effort required to produce insights. What once took hours of manual work can now be completed instantly, freeing staff to focus on client service, relationship management, and business growth.

This new capability has delivered significant benefits. Administrative work has been cut by up to 20 hours per month in some offices, and the accuracy of incentive calculations has improved, which is vital in the context of strict Sarbanes-Oxley compliance requirements. Managers now have unprecedented visibility into operations, with the ability to drill down into consultant-level data or zoom out to examine regional trends with confidence in the integrity of the information. The system also enables more effective forecasting by supporting in-depth trend analysis, allowing the company to respond quickly to changing market conditions and plan more strategically.

Beyond measurable efficiencies, SEMS has fostered a more transparent and collaborative work culture. Consultants can monitor their own progress and understand how their performance aligns with company goals. Managers and executives can base decisions on a shared and consistent view of the business, promoting unity and reducing internal disputes over data accuracy.

According to Sean Unwin, Hudson’s group commercial manager at the time of the SEMS rollout, this enhanced access to business intelligence increased the company’s confidence in executing strategy. What was once aspirational—fast, accurate, and comprehensive reporting—is now a daily reality. With SEMS, Hudson has laid the groundwork for smarter management, better service delivery, and accelerated, sustainable growth across the entire organization.

​In July 2003, Hudson, Australasia’s largest recruitment firm, took the ambitious step of launching its Strategic Enterprise Management System (SEMS). This enterprise application was designed to deliver a key performance indicators (KPI) snapshot across all corporate levels.

A quantifiable signifier of progress toward goals, KPIs are a pathway of achieving strategic and operational goals through analytical decision making. They vary between industries in what they measure, but often use a predetermined benchmark from which to measure output and operational results. The benchmark may be based on competitors in the same industry or internal business performance over time.

An example of how KPIs differ centers on a restaurant chain versus an IT enterprise. For the expansion-focused IT firm, the chief performance indicator may be year-over-year revenue growth. By contrast, the restaurant chain may focus on same-store sales as the chief KPI metric for gauging growth. KPIs may be companywide, division-wide, or focused at a more granular level on a specific product, service, employee, or operational element. The aim is to use actionable data to understand why certain outcomes occur.

The automated, web-based Hudson SEMS was powered by the Microsoft SQL Server 2000 Analysis Services platform and combined facts and figures from diverse resource planning sources. The resulting business activity report summarized, combined, and processed data from more than 300 KPIs. It delivered a “single version of the truth” that allowed stakeholders across the company to coordinate efforts and work toward the same, measurable goals.

The system integrated MIS DecisionWare business intelligence capabilities and provided an in-depth analysis of KPIs, as well as predictive value reporting. It also provided a template for managing staff scorecard workflows, with a focus on increasing productivity.

Having these unified insights was critical for Hudson, given that the company included 3,300 employees operating in 28 countries and 101 offices. In New Zealand and Australia alone, there were 17 offices and around 1,200 team members. Specialist consultants drew on industry knowledge and contacts in interviewing recruited applicants, ensuring that they were good organizational fits.

The SEMS employed electronic data collection protocol across staff activities. This took the place of existing paper­based procedures, which required manual collation and were labor intensive. Before the SEMS came online, consultants self-completed monthly reports that documented their activities and progress toward performance targets. Finance staff then took the data and compiled it in spreadsheets, which enabled performance comparisons among employees and allocation of bonus payments.

As Hudson’s group commercial manager Sean Unwin described it, this time-consuming process took staff members away from servicing clients, as they focused on simply filling out forms. In contrast, the automated system accurately measured each staff member’s performance and helped analyze, manage, and track organizational objectives. Mr. Unwin noted that interpreting the data and using it to the company’s advantage still required extensive human input.

A benefit of the MIS DecisionWare business intelligence solution was that it provided an open architecture that could easily be changed to reflect evolving organizational mandates and company requirements. It also provided transparency, which fostered a sense of collaborative effort and shared goal-setting among employees.

In regard to consultants, an in-house customer relationship management system recorded their full range of interactions with clients. Details of calls, such as client name and job position, were summarized in tables that were processed within the SEMS system. Managers could then “drill up, down, and sideways” in a dashboard report, uncovering everything from Australian operations revenues to specific services provided by consultants to specific clients.