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“Few firms achieve sustainable growth over a period”

Special Correspondent

CHENNAI: Very few firms are able to achieve sustainable growth (both top line and bottom line) over a period and most companies find it difficult to sustain growth even over a period of five years, D. Shivakumar, managing director, India, and vice-president, Nokia, has said.

Quoting studies to bolster his ideas during a 30-minute presentation, Mr. Shivakumar said that at any point of time, only 30 per cent of the companies had grown faster than Gross Domestic Product and inflation put together.

“The reference benchmark is that your top line growth has to beat GDP growth and your fixed costs must come down at a higher rate than inflation,” he told members of the Confederation of Indian Industry at a fellowship evening hosted by UniverCell and CavinKare on Saturday.

He said that only five per cent of firms showed profit and growth over an eight-year period and over 15 years, this went down further to only one per cent of the firms. Only one in four firms achieved profitable growth over four years.

The challenge for companies today was to meet predictable profitable growth. To achieve this, it was essential that the top 10 per cent of the leaders in the company spoke a common language, worked harmoniously with each other suspending their own silos of work, communicated goals to the rest of the company and managed stakeholders well. When the top management embraced these concepts, sustainable growth was achieved. C.K. Ranganathan, chairman, CII – Tamil Nadu, said it was important for a business to understand and decode customers and engage with them on a continuous basis.

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