By: Chuck Frey
In most cases you and your colleagues will need to shift your understanding of where top-line growth has come from in the past to a new model that better fits the challenging times in which we all live today.
In this article, we’ll cover step three in using demand innovation techniques to find sustainable growth opportunities for your business focuses on how to leverage an understanding of customer problems and your own Hidden Assets. The first two articles in this series can be found at my Manufacturing Line on AllBusiness.
A brief review of these principles covered so far:
No growth zone
Adrian Slywotzky, author of How to Grow When Markets Don’t, says many companies have been stuck in this zone for the last decade or more because their businesses have moved from a past of strong growth into a future state of low or no growth. Very few companies have figured out how to break this cycle and move beyond this No Growth Zone.
One reason for this is that most companies have relied on traditional “product-centered” strategies for growth. The problem is that today most markets are saturated with minimally differentiated products. This is the case for companies of all sizes, not just large ones. Think about how differentiated and distinctive your products really are compared to your competition.
Both Slywotzky and Chris Zook, author of Unstoppable, advise companies to understand what their “hidden assets” are and find ways to leverage them to generate new opportunities for profitable growth. Hidden assets include the following:
- Undervalued business platforms
- Unexploited customer assets
- Underused capabilities
Understanding your hidden assets will help you to uncover potential new businesses to enter, new or improved products, valuable market segments that can be mined, customer knowledge that can be leveraged and new ways of combining your capabilities that yield new value to your customers.
Developing a profitable growth plan
In most cases you and your colleagues will need to shift your understanding of where top-line growth has come from in the past to a new model that better fits the challenging times in which we all live today. The following points should help expand your understanding:
- Shift from a “Product Centered” sales growth strategy to an “Economic Centered” model that looks for new ways to deliver real value to customers, solve their most difficult problems and develop better ways to identify and meet their unmet needs.
- Stop relying on developing the latest blockbuster products and develop a series of evolutionary, customer-focused market growth strategies that rely on leveraging your company’s creativity and ability to deliver for your best customers.
- Look at the size of your business, no matter how large or small, for the advantages it represents and leverage this as a competitive advantage to your customers.
- Make sure profitable growth is driven through every level of your company so that managers, supervisors, line workers, engineering, finance and clerical staff are all engaged (and rewarded) in seeking out new pportunities for growth. An example is by employees finding ways to innovate and drive costs and waste out of operations related processes, cash can be redirected to support emerging growth opportunities, wherever they come from.
- Develop lots of small or even maverick ideas for growth rather than a few large ones. It is critical to view innovation as a process and not some mystical science, and to manage this innovation process.
- One simple rule is that the more ideas for growth the better, particularly if they come from the people in your organization that are closest to your customers. But this process must be supported. There are terrific ways to generate lots of new opportunities for growth by engaging with outside consultants that can help your develop a process that works for your company. The key is having a formal review process to evaluate ideas using elements of a stage-gate process that work for your company.
- Form a small cross-functional team and visit your best customers to determine what types of challenges and problems they encounter during their business processes that “surround” the products or services they buy from you. This is a non-traditional sales call. Come back to the ranch and evaluate what your team learned and how you can use your hidden assets to solve your customers’ problems and find new ways to deliver value to them and generate new sales at the same time.
By applying these techniques on a continuous basis aimed at leveraging your knowledge and Hidden Assets your team will find sustainable ways of growing profitably and develop new ways to enhance your company’s competitive advantage.