Grow your company like Google

March 16, 2011: 12:09 PM ET

Google and Apple came to dominate the smartphone world in part by developing a platform for third-party developers to sell their apps. Why this growth model applies to your business.

By John Hagel and John Seely Brown, contributors

Apple's APP Store

Apple's App Store is one example of how companies can use leveraged growth principles.

As the economic outlook begins to brighten, executives are turning once again to the opportunities and challenges of growth. Investors are looking for companies that can deliver high levels of sustained profitable growth -- but cutting costs can only do so much.

We will wager that when most of you think of growth, you tend to focus on two options: organic growth or acquisition-driven growth. A company can either build new capabilities internally or buy it.

This mindset misses a third path: leveraged growth.

We don't mean leverage in terms of financial leverage -- adding more and more debt to the balance sheet -- that is what got quite a few companies into trouble during the downturn. We are talking about a different kind of leverage -- the ability to access and take advantage of other individuals and institutions in ways that help your customers.

This is a leverage that can work in bad times as well as good times. If done in the right way, it can generate returns and avoid the dilemma of diminishing returns that is common with traditional growth initiatives, which are characterized by a burst of growth followed by a rapid leveling off.

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About These Authors
John Hagel III and John Seely Brown
John Hagel III and John Seely Brown

John Hagel III is co-chairman and John Seely Brown is independent co-chairman of the Silicon Valley-based Deloitte Center for the Edge, which conducts research to support corporate growth. Hagel has nearly 30 years experience as a management consultant, author, speaker and entrepreneur. From 1984 to 2000, Hagel was a principal at McKinsey & Co., where he was a leader of its strategy practice. Brown is a visiting scholar and advisor to the provost at the University of Southern California. He was the chief scientist of Xerox Corporation and the director of its Palo Alto Research Center. Brown holds several patents and was inducted into the Industry Hall of Fame in 2004.

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