Fast Growth: The Essence of Growth

2008-12-18

Most managers would agree that it is better to have an outside-in perspective than an inside-out one. Numerous consultants suggest that successful companies have to look at themselves as an outsider would to understand customers’ needs. Admittedly, looking at a company from the outside in is important. It provides managers with new ways to look at old problems, but it simply isn’t good enough anymore because the rules have changed. Looking from the outside in makes a company reactive to market demands. To innovate value, however, a company must stay ahead of customers, not competitors, and an outside-in perspective, by itself, just doesn’t cut it anymore.

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Strategy Lessons from Mavericks: Sizing Up Your Strategy

Few companies consciously set out to be just another me-too player with another ho-hum business model, following a bland formula that’s hard to distinguish from everyone else’s. But in industry after industry, that’s precisely how most companies wind up competing, which is why competition feels so unforgiving. In his hugely influential book The Innovator’s Dilemma, Clayton M. Christensen awakened business to the power of “disruptive technologies”—digital breakthroughs that reshaped the governing economics of entire product segments, sometimes whole industries. We believe that a new wave of strategic innovation is being built around disruptive points of view. Maverick leaders don’t just strive to build high-performance companies. They champion high-stakes agendas. They create a competitive edge around an edgy critique of their industry. They present a fresh take on the world that clicks with customers, energizes employees, and shapes their business, from the markets they arget to the customers they serve and the messages they send. They understand that the only sustainable form of market leadership is thought leadership.

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Nine Routes to Industry Revolution

2008-12-16

Unless you are an industry leader with an unassailable position- a status that, given the lessons of history, not even Microsoft would be wise to claim- you probably have a greater stake in-staging a revolution than in preserving the status quo. The opportunities for revolution are many and mostly unexplored. How should a would-be revolutionary begin? By looking for ways to redefine products and services (Radically Improving the Value Equation, Separating Function and Form, and Achieving Joy of Use), market space (Pushing the Bounds of Universality, Striving for Individuality, and Increasing Accessibility), and even the entire structure of an industry (Rescaling Industries, Compressing the Supply Chain and Driving Convergence).

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Gary Hamel on Strategy: You Can’t See the End From the Beginning

A strategy-making process that involves a broad cross section of the company, delves deeply into discontinuities and competencies, and encourages employees to escape an industry’s conventions will almost inevitably reach surprising conclusions. At EDS, such a process convinced many in the organization that it was not enough to be a business-to-business company. As the dividing line between professional life and personal life was blurring, EDS realized that it had to become capable of serving individuals as well as businesses. After an open and creative strategy-making process, EDS installed automated teller machines in many 7-Eleven stores. Months earlier, few would have anticipated, much less credited, such a move.

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Should a Company Message Along an Emotional or Functional Dimension?

Thus far we have talked about communicating messages of functionality to customers (see posts: Why Does Messaging Often Fail to Tout a Product’s True Value; Prerequisites for an Effective Messaging Strategy and What Messaging Will Be Most Effective?), but it is also true that customers sometimes have emotional as well as functional jobs that they are trying to get done. When buying a car, for example, the buyer’s emotional jobs may include feeling successful, having a sense of self-satisfaction, or being attractive to others, while his or her functional jobs may include transporting passengers, transporting goods, and finding the most direct route to his or her destination. Companies often feel the need to appeal to their customers’ emotions, but depending on the functional and emotional complexity of the product or service being delivered, doing so can bring unexpected and unwanted results.

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Discovering the New Business Model: Redefine Who Really Is the Customer

The second source of business-model innovation is a fundamental rethinking of the question, “Who is my customer?” (The first source is what business it is in) Implicit in this question is the idea that the choice of customer is a strategic decision — it is the company that chooses its customers and not vice versa. The criterion for choosing who will be a customer and who will not should be some kind of assessment of whether a customer is good — for that company — or not. The trick, therefore, is to identify for your company which customers are good (and keep them or go after them) and which are not (and so avoid or get rid of them). But again, a good customer for one company may be a bad customer for another. Whether a customer is good or bad depends not only on the intrinsic characteristics of that customer — such as its willingness and ability to pay on time or its profitability — but also (and primarily) on whether a company is able to serve that customer better or more efficiently than its competitors as a result of its unique bundle of assets and capabilities.

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Exploit a High-Growth Market Segment: Lessons from America’s Top Successful Companies

If you are looking for the product lines that create the greatest number of Blueprint Companies (i.e. defined as an American company that grew to $1 billion revenue since going public after 1980), do not expect to find routers, wires, high-speed chips, modems, and hard drives among the mix. Rather, the components you would likely find have names like Olivier, Absolu, and Duraclear. Not to mention Ruffoni, Krups, and Jardin Potager. This is really surprised if looking at the total number of Blueprint Companies by industry, the Specialty Retail Store industry was far away number one, with 18 companies. Second was Property & Casualty Insurance, with 15 companies. Absent from the top of the list was Telecommunications Services—the Internet! In other words, cyberspace, for all its hype over the last 10 years, has not produced nearly as many Blueprint Companies as one would think.

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