This summer was an exceptionally busy one. I’ve been traveling around the country meeting with customers and learning about their challenges when it comes to growing their business. Through these discussions, I’ve seen a very interesting trend among both small and large companies.
Companies are struggling to understand what customers want – at least fast enough to adapt to changing customer needs and market forces. They want to, but they are held back by regimented, rigid business practices.
This is so common that it’s normal. As businesses grow, a natural process occurs – processes and culture solidify, often so much that they congeal. Thinking becomes more top-down and insulated. It gets more and more difficult for outside forces to crack through the shell and influence decision-making… outside forces such as the customer.
All of these companies face uncertainty. We live in the age of disruption, and companies are well aware of the challenges they face or will likely face in the future. These could be generational differences, government regulation, distribution channel changes, buyer behavioral changes, technology advancements – you name it. Change is a constant.
Because of this, companies understand the need to monitor their market, and they get the value of good customer research. In fact, they may be spending lots of money and time on market research reports that stop too short when it comes to driving action (partially because the research is conducted only every 3-5 years on average).
This is perhaps the curse of a successful company. All of our clients are ambitious market leaders that are serious about growth. But along with success comes the congealing of organizational behaviors and habits - the very things that sparked initial growth can become the biggest barriers to ongoing growth.
As Marshall Goldsmith has famously said, “what got you here won’t get you there." Companies are founded on meeting a certain customer need, but, over time, they drift away from this connection with their customer and instead make decisions by responding to operational requirements, incumbent philosophies, and existing capabilities.
Next thing you know, instead of building competitive advantage, you’re losing ground to competitors. You’re getting eaten by innovators.
Growth strategy has changed. It’s no longer about sustaining a specific competitive advantage over time – it’s about developing a strategy to sustain growth over time.
Some industries face particular challenges when dealing with market changes. Take healthcare, for example, which is undergoing transformational changes when it comes to patient expectations and reimbursement models. Or manufacturing, which faces increased global competition and vast changes in distribution models.
All businesses face uncertainty, regardless of industry. They know that something will need to change in order to compete in the future. But executives are often unclear what the “something" needs to be. They lack information to feel confident about the direction their strategy should take.
It’s ironic that, in the age of big data where we can measure anything and everything, we find ourselves in a weak position to create and execute data-driven growth strategy. The old standard tools no longer deliver the results we need. We need a new engine to get growth moving at the fast pace of today’s business.
What we need to do is to align the organization around customer needs and a deep understanding of how customers make choices within their competitive market. This sounds perhaps simple and obvious, but we’re often talking about transformational change.
The stark reality in today’s market is that you can’t take your eye off customer needs for a minute or a new market entrant will swoop in and steal your market share. If you don’t know the drivers of your customers’ choices, you’re vulnerable.
This is where my team here at Vennli has fun. We love testing assumptions and identifying new avenues for business growth.
As my co-founder Joe Urbany says, growing your business boils down to a simple 9 word imperative: Be different from competitors in ways important to customers. Therefore, nothing is more important than understanding why and how your customers make decisions in the context of your competitive market – and, of course, this is constantly evolving.
Vennli revs the growth engine by providing insights into customer choice and visualizing the data in a way that allows executives to make confident decisions about the growth of their business. Cutting through the noise, the path to growth now seems clear.
When you’re capturing insights related to customer choice in an ongoing way and using that to drive your strategy, something interesting happens: Your process for developing growth strategy that’s aligned with customer needs becomes a competitive advantage all its own, and the engine is revving all the time.
We’re no longer talking about annual strategic planning cycles and a few SWOT analyses – we’re talking about relentless pursuit of growth throughout the year and maintaining a constant pulse on customer perceptions in order to make better decisions.
Let’s consider some examples. Currently, we’re working with a nationally well-known client looking ten years into their future. They provide excellent service, but they have had dormant and stale customer data. But, beyond just needing data, they need a decision-making tool. They need to identify where their growth will come from this year and over the next 5 years. And they need this information in an ongoing way because they are making strategic decisions about the growth of their business in an ongoing way, not just annually.
We’re also working with HR departments to create talent strategies that are built on an understanding of the drivers of employee engagement. In modern companies that are well-positioned for future market challenges there’s a focus on internal and external customers.
At the core of every challenge to a business’ growth is a customer making a choice. Therefore, logically, the customer should be at the core of every decision a business makes. You can either start now and be on the cutting edge of your market or experience a rude awakening when growth stalls and your market is disrupted.
"There is only one boss. The customer. And he can fire everybody in the company simply by spending money somewhere else." Sam Walton