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Any well-run manufacturing factory has a detailed production schedule that details desired output. Similarly, companies building a growth factory should have at least four different levels of targets:

1 Overall company performance targets that describe short- and longer-term revenue and profit goals

2 Specific targets for each growth type spelling out how much each will contribute to the overall targets

3 Operational targets splitting out growth goals by relevant operating units (e.g., business units, geography)

4 A short list of the strategic opportunity areas that offer the most growth potential (e.g., customer segments, big problems to solve, critical technologies to pursue, game-changing regulatory developments)

For example, Procter & Gamble has clearly articulated targets for its growth efforts over short, medium, and long time horizons. It carefully details where that growth should come from, developing a target portfolio that considers balances such as organic or acquisition; domestic or international; growth from existing categories or new category creation. P&G gets specific, analyzing which markets it plans to target and, by default, which markets it will not target.

Citi has begun to incorporate an innovation lens into how it sets its own growth targets. Some of Citi’s largest businesses are now analyzing and moving toward balancing their growth pipelines by focusing on Citi’s growth types of core, adjacent, and disruptive innovations. In addition, Citi has established a number of strategic opportunity areas that orient its innovation efforts. For example, the Citi Ventures unit, which is a primary catalyst for adjacent and disruptive innovation, has defined six strategic focus areas. These focus areas—influenced by globalization, social media, the consumerization of IT, and other trends—have allowed Citi to focus efforts to build deep expertise.

Identifying strategic opportunity areas is particularly important at industry inflection points. In 2006, the leadership team at Turner Broadcasting System’s entertainment networks (including TBS and TNT) approached the annual strategic planning process differently. At the time, the vast majority of the company’s entertainment programs were syndicated—that is, content that had previously aired on network television that Turner rebroadcasted on its cable network. Typically, the company created five-year plans detailing incremental changes from current results (e.g., 5 percent growth in year one, 7 percent in year two, 3 percent in years three through five). But leadership recognized several nonlinear shifts in its market, such as changes in viewer habits and advertiser behavior driven by emerging models such as YouTube and Netflix. The team used simulation tools to understand the potential impact these changes could have on its business in 2011. Its “future-back” analysis suggested that continuing today’s strategy carried significant risks. The team leading the analysis then identified five ways in which it would respond to the change, including increasing investment in original programming and developing new advertising models such as TVinContext, a marriage of Google’s online contextual search advertising and traditional thirty-second television advertisements. Today, Turner’s entertainment networks feature a range of original content, and its business has surged. Clarity in strategic opportunity areas served as a vital guide to these transformational efforts.

Beyond setting goals, companies should work to share goals throughout the organization. P&G uses a range of communication tools to ensure that key leaders share a common understanding of growth targets. For example, leadership creates simple documents summarizing strategic choices and the measures it will use to track progress. It spreads these documents through the organization to build strategic alignment. This alignment helps ensure that the company’s portfolio tracking systems monitor the right things, informing critical leadership discussions about innovation. This integrated view proved critical at two junctures. In the early 2000s, P&G recognized it was in danger of missing growth targets due to its low innovation success rate; the company then approached innovation more systematically and created its Connect + Develop program to source more ideas externally. In 2008, a strategic review led by select senior leaders highlighted that P&G’s pipeline was still bogged down with too many small projects. In response, the company increased focus on the transformation-sustaining growth type. P&G also created several dedicated new-growth groups, and revamped its strategy development and review process. In both cases, an integrated view of its growth blueprint enabled P&G to identify and respond to gaps in its current pipelines.

Finally, companies need to ensure that goals are consistent with measurement and reward systems in ways that ensure they are part of the everyday fabric of the company.