No excuses for lack of high-growth

Microsoft’s $69 billion acquisition of Activision Blizzard reminds me that no company has an excuse for substandard growth. Despite its size, Microsoft has managed to triple its revenue over the past 10 years, delivering between 9% and 10% average growth in key indicators such as revenue, net income, and free cash flow.

Though mainly from organic growth, several successful and failed acquisitions played a role. Nokia, Skype, etc. are reminders that you cannot reach if you’re not prepared to fail. Microsoft’s acquisitions have enabled it to enter promising markets, and expand or consolidate others, whilst identifying and executing on winning business strategies have enabled it to capitalise on the opportunity in its existing markets.

If a company the size of Microsoft can deliver 10% a year, companies that are 1,000^th of its size have no excuse for not growing much faster growth. The challenge remains pulling together a team that has the skills to get into the right markets, get out of the wrong markets and identify and execute winning strategies.