/Enhance corporate value with the “slim growth” approach

Enhance corporate value with the “slim growth” approach

Facing the three-stage superimposed economic new normal, in 2015 the central government put forward the strategic thinking of supply-side reform and the important measures of three-to-one-one-one-one-up. Implemented at the enterprise level, the State Council reviewed and approved the “centralized enterprise reform plan for slimming and strengthening the body” in 2016, and decided to adopt five major measures to promote the central enterprises to improve their health, improve quality and efficiency. The “slimming fitness” proposed by the central government and the “slim growth” proposed by PricewaterhouseCoopers are highly consistent in concept.

“fit-for-growth” is a large-scale corporate transformation development concept proposed by PricewaterhouseCoopers’ strategy consultancy Strategy & Strategy after the 2008 economic crisis. At that time, many highly global and diversified enterprise groups faced the dual pressures of cost control and strategic growth . How to balance the relationship between the two is a major challenge. Enterprise managers need new ideas and tools to help decision-making and advancement. Implementation.

The concept of lean growth believes that in times of crisis, we must first optimize the business and assets, selectively reduce costs (avoiding a one-size-fits-all impact on core competencies and destroying organizational genes), and secondly continue to increase the potential for high-potential businesses. The input of core competencies to maintain strategic coherence, once again to take advantage of opportunities to improve organizational effectiveness for the future.

Since 2008, PwC has used “slim growth” tools and methods to help hundreds of companies successfully transform. In recent years, large-scale enterprise groups in the basic industry are facing challenges in terms of scale, efficiency, and structure. In practice, we have found that the concepts and methods of lean growth are very suitable for the development requirements of these companies to “bigger, better, stronger”. The growth of large enterprise groups with Chinese characteristics includes the following three aspects:

First, investment growth: investing in the core capabilities required for new business and further development of the enterprise, including but not limited to the development of industrial chain integration business, related diversified business, international business, Internet + business, other innovative business and establishment of investment Financing ability, merger and acquisition ability;

The second is to optimize assets and costs: to optimize the inventory assets and cost structure, including revitalizing existing state-owned assets through capital operation methods such as securitization and equity trading, reducing inventory, reducing costs and reducing costs through three-to-one compensation and operational optimization methods. Financial costs;

The third is to improve organizational effectiveness: to improve the overall effectiveness of the organization by optimizing organizational structure, responsibilities, management processes and information mechanisms. Compressing the management level and shortening the management chain are the first steps to improve organizational effectiveness, including mixed ownership reform. The reform of large enterprise groups such as employee stock ownership and professional manager system is the next step to improve organizational effectiveness;

In accordance with the concept of lean growth, we can simultaneously promote the three aspects of the initiative, which can effectively solve the three sets of contradictions in the development of large-scale enterprise groups. One is the contradiction between reform and development, the other is the contradiction between stocks and increments, and the third is strategy and The contradiction between operations is truly bigger, better, and stronger.

For large enterprise groups, due to the development concept of lean growth, each business unit and business unit, as well as the various functional departments of the upper and lower functions, need to be combined, so they need to be co-ordinated under a systematic plan under the leadership of a strong team. .