Growth unleashes benefits beyond the economic. It revitalizes organizations and invigorates the people in them, creating energy, a sense of purpose, and the glow of being on a winning team. Like the alchemy of old, it seeks to transform the everyday into the exalted by means that seem little short of magical. Yet growth is often elusive, achieved at unacceptable costs, or managed in fits and starts. Based on over three years of research and application at high-performing companies around the world, The Alchemy of Growth is a comprehensive, practical approach to initiating, achieving, and sustaining profitable growth—today and tomorrow. As the book shows, the secret is to manage business opportunities across three time horizons at once: extending and defending core businesses, building new businesses, and seeding options for the future. The Alchemy of Growth offers managers at all levels the tools and concepts for investing in the right initiatives, capabilities, and talent to propel their companies into the future.

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As you would expect of a book out of the McKinsey stable, this is on an issue of importance to business, is well researched and analysed and very readable and well presented. As you would also expect, it is focused on large corporates, and on strategies for their business success, as measured by exceptional growth and returns to stockholders.

It provides one important perspective on the issue of corporate growth and development, to be compared with other perspectives.

There are obvious comparisons with Collins & Porras: 'Built to Last' both in the concern with continuing exceptional performance over an extended period and in the care taken to explain the research base from which the findings are derived. However, whereas Collins & Porras are concerned primarily with values and culture, Baghai et al are primarily interested in strategies for the selection, development and management of a portfolio of businesses and the implications of those strategies for structuring, staffing and operations.

The fundamental thesis is simple and can be stated in a few propositions:

The companies that have been successful in maintaining high rates of growth with superior profitability are those that have learnt to manage well to three different time horizons at the same time - today's business, the next generation of emerging businesses, and the longer term options out of which the next generation of businesses will arise.

In order to develop longer term options into 'core profit engines', a series of measured steps (concerned with finding ways of profitably building core capabilities and markets) are required, which the authors call 'stairways'. In the nature of things, not all stairways will lead to future core businesses, so a variety of initiatives need to be carried forward together. Management of the 'stairways' should receive significant senior management attention.

The skills and temperaments required to manage current business, to develop new business and to search out viable future options are widely different one from the other. The key to maximising the profitability of today's business is excellence of execution. Emerging businesses require business builders - the typical entrepreneurial temperament, while the identification of future options requires lateral thinkers and visionaries.

In consequence, the style of organisation and internal culture most appropriate to each of these foci are also different. Large corporates tend to find difficulty in encompassing these very different cultures. The authors discuss in some depth the resulting issues of internal culture, recruitment, structuring and transition, and their strategic management.

The strength of the book is that the authors identify a key issue in business success - the development and maintenance of a vigorous portfolio of businesses over the longer term - and work through the implications with clarity and thoroughness.

The cost of that approach is that other equally significant issues are assumed or left in the background. It is necessary to balance the valuable perspective offered with others that are also important. It is also necessary to be aware of the underpinning tacit assumptions - for example, the underlying metaphor of organisation adopted by the authors appears to me to be much nearer that of the organisation as a (money) machine, than that of the organisation as an organism. There is a marked contrast with the emphasis in, for example de Geus: 'The Living Company'. This is not to say that either is wrong, only that neither is complete.

6 of 7 found the following review helpful:

GREAT INSIGHTS BASED ON SOLID RESEARCH =s A WINNER.Apr 22, 1999

This book is based on research on 30 companies in Asia, Australia, Europe, and North American, selected for exceptional sales and profit growth. The research findings reveal a three-phase pattern for growth which is analyzed and illustrated with cases. The pattern encompasses the embryonic, emergent, and mature phases of a business's life cycle. The underlying pattern is a continuous pipeline of business-building initiatives that focuses on three horizons: extending and defending the core business; building emerging businesses, and creating viable future opportunities. This examination of growth strategies proves highly enlightening. The combination of insights based on solid research yields a great book. The appendix profiles each of the firms the authors' studied. Recommended. Reviewed by Gerry Stern, founder, Stern & Associates, author of Stern's Sourcefinder: The Master Directory to HR and Business Management Information & Resources, Stern's CyberSpace SourceFinder, and Stern's Compensation and Benefits SourceFinder.

18 of 24 found the following review helpful:

My Dead Tree Award - Big Print and HUGE appendixJul 16, 1999

How to turn a booklet into a book --> use big print and add a huge appendix (about half the book). It took four authors to write this book?

Make a nice short read in the bookstore cafe but it won't last more than a cup or two.

Here's a chapter's worth - manage three growth time-horizons simultaneously. I just saved you a cup.

However, the content IS important and useful.

3 of 3 found the following review helpful:

The BCG growth-share matrix for the late 90'sApr 19, 1999
By Zoran Svetlicic
Although one should always be skeptical of consultant-authored business books, on occasion they combine academic thought with practical experience to generate real insight. This is one such book.

In addition to striking a chord with big company CEO's frightened of startups (by strange coincidence a lucrative market for McKinsey), the authors discuss a variation of corporate portfolio theory that emphasizes timing as a critical dimension. This provides for a useful mental exercise, although the discussion gets a bit light at times.

Think of it as the BCG matrix for the late 90's. A simple concept that can be powerful if applied correctly, or destructive if blindly followed.

5 of 6 found the following review helpful:

Very useful models and abstractionsJun 05, 2000
By frumiousb "frumiousb"
It seems like a no-brainer that companies need to grow in order to survive or compete, and this book isn't interesting because it tells us what we already know. What's interesting about this book is that the authors do a wonderful job of taking substantial research, abstracting the trends, and rendering their findings into very clear and usable models and messages that can help most managers who are thinking about growth. It was particularly interesting for me, as I work as an ebusiness consultant for a large IT integrator and many of my customers are trying to start new staircases (as described in the book) via Internet channels and I can immediately see the applicability of Alchemy to what they're trying to do.

The book is a quick read (almost comically quick, given the price) and mercifully low on buzz words. Right now, I don't see the appendix as being particularly useful, but I may find it more so later. Annotating the bibliography would have added a lot of value.

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