The Growth Imperative
By:
Clayton Christensen
- "Financial markets relentlessly pressure executives to grow and
keep growing faster and faster. Is it possible to succeed with this
mandate? Don’t the innovations that can satisfy investors’ demands for
growth require taking risks that are unacceptable to those same
investors? Is there a way out of this dilemma?"
Life is not fair definitely applies in this case. I don't envy the
pressure the executives are under to meet the demands of the
share-holders. It takes real intestinal fortitude to survive and
hopefully thrive in their position. Of course they are well compensated
for the pressure they are under, so no sympathy here. UTC has managed
to stay in the game for decades and I believe part of their success is
attributed to the fact that they don't have all their eggs in one basket
and continue to adjust their business acquisitions to better position
themselves in the market. They have their core business units which
give them their constancy and capitol value and they have a set of
smaller business venture type units which they "play" with in the stock
market. They are taking a risk right now with their latest acquisition
of Goodrich. We'll see how this plays out in the long term.
UTC has also invested heavily in off-shore markets which gives
them leverage and makes them more competitive. All that being said,
they are not too big or successful to fail and therefore must always be
on the look-out for dangers and opportunities looking forward. Timing
is as critical as selection when it comes to investments and decisions to sell off divisions. So far, they've proven themselves successful.
