Importance Of Organic Growth & Different Paths To Success

Businesses pursue growth in many ways. The goal, however, remains more or less the same: Organic growth is primarily about increasing the overall revenue, “health,” and performance of a business. And as such, it’s the key to your business’s future. That’s why today, we’d like to take a moment to discuss the importance of organic growth and see how it may benefit your business in the long term.  

What Is Organic Growth? 

When it comes to business, the “sources” of growth can, broadly speaking, be classified into two main categories – organic and inorganic. Organic (also known as internal) growth can be defined as the business strategy that aims to improve the company’s growth, mainly in terms of boosting revenue and output, through internal efforts and resources. It is about leveraging your in-house processes – and existing relationships, skills, and knowledge – as a way to drive growth and revenue and expand market share.
Here are a few examples of how you can achieve organic growth: 

• Creating high-quality content that resonates with your audiences 
• Increasing brand awareness and promoting your products and services 
• Building and maintaining good customer relationships 
• Optimizing your core capabilities, including marketing, pricing, and sales 

The point is that – unlike mergers and acquisitions, which are considered “inorganic growth” – organic business growth stems naturally from your internal efforts. So, the focus should be on growing a business from within rather than relying on strategies that only focus on increasing your assets, liquidity, and liabilities. If you don’t have the resources to support such internal efforts, though, don’t hesitate to seek out some “external” help. You can get in touch with Pastilla and see how our team can assist you in creating high-quality content, promoting your products and services, and increasing brand awareness. 

That said, this is rarely an “either-or” type of question; growing both organically and inorganically is a hard-to-pull-off balancing act, more than anything else. 

Importance & Benefits Of Organic Growth 

Considering that organic growth forces you to employ your in-house expertise and experience in a more efficient and effective way – and motivates you to grow your business from within – it can benefit your company in many ways. 
Here are some examples: 

• Due to its nature, organic growth preserves existing company culture, meaning it creates much less disruption for employees and clients alike. 
• Organic growth typically carries a lower risk since it’s based on expanding the areas that your business is already good at and financed with your revenue rather than any outside sources. 
• It’s typically easier for a business to manage and control internal growth because it tends to be steady and sustainable. 
• Sustained organic growth can improve the shareholders’ confidence in the business and, in some cases, even attract new investors.  

Of course, organic growth takes a bit longer to achieve – and, as such, it might only be suitable for businesses that are fine with advancing at a slower, more controlled pace. But looking at it in the long term, it’s arguably the better route to take because, in the end, you are still an independent entity that hasn’t slipped into substantial dept. 

You’re working with what you’ve got – it’s as simple as that. And yet, it’s not. Growing your business organically could be risky in the sense that you typically have somewhat limited resources at your disposal, making it that much more important to oversee everything and ensure that the right people are in charge of putting your organic growth strategy into effect. So, for example, if you invest in content creation, make sure that the person in charge is someone who can tell your brand’s story, knows your brand voice, and can align their message with your brand’s vision and purpose. 

A Closer Look At Top-Growth Companies 

A recent McKinsey Global Survey suggests that, regardless of the exact growth strategy that the business pursues, there are certain “core” skills and capabilities that top-growth companies tend to excel in. The important ones – according to the survey – are branding and creating the right organizational culture and mindset. 

Of course, there are three different paths to growth – reallocating funds and investing in activities that support growth, creating new products, services, or business models, and performing better by optimizing core capabilities. While up to 93% of surveyed companies report pursuing at least one of these strategies in the past three years, roughly 35% of them reported a diversified approach – following more than one path to growth. 

Here’s what’s interesting, though: 

Even among businesses that used multiple growth strategies, a significant portion of their recent growth still came from a growth strategy based on investing in existing products and commercial activities. And yet, when asked about future plans, more than half of these companies declared that they’d pursue creating new products, services, and business models as a means of generating organic growth. 

So, if there is one thing that is evident here, it’s that there is more than one way to get to the top – although creating- and performing-based strategies are most often associated with a higher rate of growth.