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Why These 50 Companies are Positioned for Breakout Growth

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Fortune Magazine and Boston Consulting Group just teamed up to create their inaugural "Fortune 50" list.

The list ranks companies best positioned for breakout growth in the years to come.

I love the list for a few reasons.

First, because it highlights some incredible companies and their amazing successes, like Salesforce (#1 on the List), Tesla, Intuit, Tableau, Splunk, and GoDaddy.

And, because the insights from the methodology utilized to create the list allow any executive, no matter their industry or type of business, to make their company perform better right away.
 

Its first component is an evaluation of a company’s market potential, defined as the “Present Value of Its Growth Opportunities (PVGO).

PVGO measure is the premium the stock market is willing to pay for the “hotness” of a company’s market sector. 

So companies ranked high on the Future 50 like Tesla, Facebook, and Netflix, driven by the great market bullishness for electric vehicles, social media, and on-demand entertainment respectively, score very high by this measure. 

The lesson here is pretty plain and simple.

For a higher probability of breakout growth, executives should study and understand carefully the overall growth of their market sector and if it is too low...

...then to think long and hard about pivoting to a more attractive one.

The next component of the methodology measures a company’s ability to actually deliver on its market potential.

This is described as a company’s vitality measurement - i.e how much internal strength and "bones" does it have to actually convert upon and profit from its market opportunities?

Into this determination go factors like Technology and Investment, i.e. the more a company invests back into itself, into its people and intellectual property (both via internal R&D and acquisitions), its probability of breakout growth commensurately goes up.

And it discovers, not surprisingly, that Younger-Aged leadership teams that have worked together for a long a time are more likely to deliver on breakout growth than older, recently assembled ones. 

While perhaps not politically correct, the statistics show that teams lead by chronologically older executives often struggle with change and growth.

Finally, the methodology makes powerful use of artificial intelligence tools like machine learning and natural language processing (NLP) to analyze 200,000 earning calls and 70,000 10Ks to measure the soundness and consistency of a company’s strategy and its capacity for innovation.

Here, the highest correlation with long-term revenue growth was found at those companies where their executives defaulted to words like "invest" and "vision" versus words like “current” and “short-term.” 

And, when those executives demonstrate Biological Thinking, or “ability to address the uncertainty and complexity of business environments with flexibility and adaptation.”

This may sound like a lot of jargon, but it is just the simple idea of prioritizing the long term over the short term while being willing to bob, weave, morph, and evolve in its pursuit.

Along with the simple, but so beautiful zen idea that as business leaders just talk about this kind of behavior, this alone increases their company’s prospects for breakout growth.

The Buddha famously said"we become what we think."

Well, the Future 50 List shows us that companies become great simply as their leaders think and talk about them like this every day in every way.

Can you do the same for your business? 

Want to Experience Breakout Growth Like the Future 50?  Tired of business as usual and want something BIG to happen to and for your company? 

Interested in selling your business in the next few years, or interested now in growing sales and profits?

Well, then complete this short questionnaire and we’ll reach out with our thoughts to help you.

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