We wanted share an excerpt from a Harvard Business Review article “MarketBusting - Strategies for Exceptional Business Growth” written by Rita Gunther McGrath and Ian C. MacMillan. Itself an excerpt from their book by the same name. In it they describe the eight moves (forty in the full book) companies can make to redefine their profit drivers and realize low-risk growth. As you wind down 2010 and plan for next year, RETHINK about how these ideas can positively affect your business.

1. Change your unit of business… More often than not, companies are moving away from selling a pure product and toward selling a product-service mix or even a pure service.

Privately held Madden Communications, once a conventional printing house, used to make its money by printing promotional materials for companies. In 1988, then-salesman Jim Donahugh visited a target supermarket to see his company’s materials on display. Madden’s displays were nowhere to be seen, nor could Donahugh find them at several other supermarkets he subsequently visited. Eventually, Donahugh and his bosses discovered that this was not at all unusual. Operating on thin margins, the supermarkets often didn’t or couldn’t take the time to display promotional materials properly. Donahugh also found that Madden’s customers, primarily packaged-good, companies, often over-ordered promotional materials as a hedge against running short. Money was being wasted on printed materials that were displayed badly or not at all.

Today, Madden’s customers no longer buy individual print jobs. Instead, they hire the company to print promotional materials and manage the distribution and installation of those materials on-site. Madden now focuses on a few large customers who are happy to pay more for the enhanced service. Conventional printing companies have found it difficult to respond to Madden’s move, because the new business depended on new capabilities, including the capacity to connect with customers at a senior level. Madden’s revenues grew from $10 million in 1990 to $133 million in 2004, in an industry that many had come to regard as hopelessly mature.

2. Retain your unit of business, but radically improve your key metrics, particularly productivity. You don’t always need to do something as radical as overturn the way your industry does business. Sometimes you can create dramatic growth by doing what you do right now-but much more productively. Digitization has helped many companies do this.

Lamons Gasket Company is a good example. An $80 million subsidiary of MetalDyne, Lamons manufactures and distributes static sealing solutions for the petrochemical, refining, nuclear, OEM, and pulp and paper industries. It sells more than 100,000 standard and special-order products, including gaskets, packings, nuts, bolts, and screws. Until recently, simply figuring out what customers wanted to buy and getting the right items to them was a horribly inefficient process at Lamons. Customers would phone or fax in an order, and a customer service representative would have to translate the information into Lamons’s part numbers and format. The average order cost less than $500 but took 30 to 60 minutes to get into the system. This level of inefficiency was devastating to Lamons’s profits and costly to customers as well, since they were spending the same 30 to 60 minutes to get the order right.

Then Lamons built an e-commerce Web site, and customers’ ability to find , order, and pay for goods improved radically. The company’s productivity improvements added to its bottom line considerably. Customers were so pleased by their own productivity gains that they drove up Lamons’s market share. Customer retention rates also went up-which is particularly vital to a business whole strategy depends on serving large numbers of small repeat customers.

You can purchase the entire article from Harvard Business Review here: http://hbr.org/product/marketbusting-strategies-for-exceptional-business-/an/9408-PDF-ENG