The Importance of Imagination in Business Growth

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Growth,Rules-Based Trade,Expansion

The decay of rules-based trade means that companies can no longer find growth as easily by expanding to new locations, or expanding demand through low-cost single point sourcing. In this article, the authors present a six step-cycle that is at the foundation of a corporate “imagination machine.”

The decay of rules-based trade means that companies can no longer find growth as easily by expanding to new locations, or expanding demand through low-cost single point sourcing. In this context, companies seeking growth must develop innovative offerings to expand demand. These offerings are, essentially, products of imagination — conceiving of and realizing new possibilities — a challenge that companies struggle with.

In this article, the authors present a six step-cycle that is at the foundation of a corporate “imagination machine.”Growth is critical to long-term value creation: Our analysis of the total shareholder return (TSR) of over 2,000 large companies reveals that over a five-year period more than half of it can be attributed to sales growth — with investor expectations, cost reductions, and changes in operating margin making up the rest. Over a 10-year horizon, nearly three-quarters of TSR are driven by sales growth.Accelerate your career with Harvard ManageMentor

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