Based on its 10-year analysis of the S&P Global 1200 index, IBM found that compared to the rest of the world, fewer companies in the Asia-Pacific region grew both its revenue and total shareholder revenue (TSR).
According to Anthony Lipp, strategy and change leader of IBM's Business Consulting Services in ASEAN/South Asia, only 15 percent of the 250 companies in the list that were based in the Asia-Pacific region were considered "successful growers"--those that achieved and sustained growth above and beyond their competitors.
"About 60 percent of the Asia-Pacific companies grew both revenue and TSR slower than the average for their industry counterparts," said Lipp. "While some might argue that AP companies faced several shocks--like the financial crisis--during the study period, clearly some companies were able to grow successfully."
The study also revealed that geography and maturity of industry, which are often listed as crucial to a company's growth, have little or no bearing on the actual growth of a company. In each of the four geographies and 18 industries surveyed, top performing high-growth companies not only outperformed their peers, but did so by wide margins.
For example, the study showed that the top "growers" in the slow-growth Japanese market outperformed the median growth rates in other high-growth Asian markets.
"While the world looks to Asia-Pacific for growth, this research confirms that sustainable growth cannot be achieved through location and opportunity alone," said Steven Davidson, partner, strategy and change, IBM Business Consulting Services Asia-Pacific.
"Instead, companies must aim for targets above and beyond what they and their peers typically expect and transform their business accordingly by aligning business processes, people and technology to deliver outcomes not previously possible," he added.
According to IBM's analysis, successful growth companies might not necessarily be consistent ones. Of the companies that outgrew their industry median over the 10-year study period, only 6 percent did so every year of the decade. Ninety-four percent of successful growth companies experienced at least one year of below-median growth; 72 percent fell below the median for three years or more.
"In recent years, the Asia-Pacific region has presented companies with many short-term challenges such as the Asian Currency Crisis, SARS and increasing price of fuel that have impacted economic performance, yet the long-term view is still strong," said Davidson.
"Sticking to a course, building capability and operating with conviction is even more important to companies operating in Asia-Pacific if they wish to grow successfully in the long term," he added.
The Growth Triathlon report was put together by researchers and business consultants of the IBM Institute for Business Value and based on companies included in the S&P Global 1200, beginning with the 2003 list. The performance of 1,238 companies was analyzed for patterns of revenue growth and shareholder value creation over the decade. The results were segmented by four geographies and 18 industry groups.
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