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
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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