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7 “Turbulence-Proof” Growth Opportunities For 2011
If nothing else, the past few years have proved that the world is becoming more unpredictable and more turbulent. Economic volatility, competition overload, greater customer power, unexpected disasters, international terrorism, environmental uncertainty, and an explosion in technological innovation have all helped create a world that is erratic, volatile and chaotic.
The key to successful strategy leadership in turbulent times is to be proactive and take control. The world may be full of dangers and risks, but it is also a source of endless opportunity, and changes in customer needs, economic conditions and technological innovations can provide the opportunity to create new, valuable revenue streams for your business.
This doesn’t mean you should be taking unnecessary risks. Instead you should focus on ‘no regrets’ moves that are likely to lead to success no matter what turbulence you encounter. Here are 7 ‘turbulence-proof’ sources of growth you can pursue for your business in 2011.
- Make your customers’ lives easier. The frenetic pace and complexity of every day life – both for individuals and organisations – has placed a premium on services that make lives simpler and easier. Tesco has built an incredibly powerful brand around the phrase Every Little Helps, and it’s the idea of creating many small ways in which your customers find it easier to do business with you that will drive growth. Sit down with your team and spend some time identifying where, over the past 12 months, you have made life easier and more difficult for your customers, and then agree how you can grow by making their lives easier in 2011. What 3 steps would transform your customers’ perception of how you make doing business simpler?
- Increase your organization’s speed and responsiveness. Convenience, speed and responsiveness are becoming increasingly important in our fast-paced, technological world. These investments and innovations are second nature to convenience-driven companies such as Amazon and McDonalds. Amazon, for example, now allows its customers to pay a one-off annual fee for which they promise next-day delivery on all purchases, and by 2007 over 40% McDonalds were open non-stop. But it’s not just these convenience players who are driving speed and responsiveness; companies with different competitive strategies are also raising their game. For example one of my clients, Bristan (the UK’s leading taps and showers business), a company driven by its product innovation, provides a next day delivery service for its trade customers. What are the major blocks to increasing your company’s speed, and how could you explode these barriers to step-change your responsiveness?
- Develop closer, trusted relationships with your customers. Given the level of choice available to your customers, and the ease with which they can now switch supplier, you must have clear strategies to find your customers, satisfy and retain them, and increase their share of spend with you. As in our personal lives, stronger relationships make it more likely that your customers will spend their hard-earned cash with you and stick with you when something goes wrong. It is far more difficult for your competitors to copy your relationships than it is for them to copy your prices and your products. A key step to better customer relationships is making it easier for your customers to obtain information and knowledge. Just look at Google. It’s ability to share information –for free! – has made it one the world’s most valuable brands. What opportunities do you have to share information and knowledge, and get closer to your customers?
- Look for ‘the next big thing’. Most business successes occur when a company becomes the first in its market to exploit the windows of opportunity created by shifts in their external environment. When Steve Jobs returned as CEO to Apple in the late 1990s a business school professor asked him what his strategy would be. Jobs simply said, “I’m waiting for the next big thing.” By that Jobs meant that the markets in which Apple operated were chaotic, unpredictable and driven by technological innovation and that just because the company was down at that time, it could improve its position and performance by taking advantage of a new opportunity that would definitely come along. For Apple, the ‘next big thing’ was iTunes, and its success led to the iPod, iPhone and other product successes that have catapulted the business back to the top of Silicon Valley’s list of winners. Where are the major shifts and fractures in your markets, and what ‘next big things’ could they create?
- Exploit your latent assets and capabilities. In the 1990s IBM transformed its business fortunes by turning its after-sales service support expertise into a front-line consulting business. Understanding and exploiting where you already have potential sources of competitive advantage within your existing business can dramatically accelerate your growth and profitability. You will benefit from the fact that you do not need to invest as much to generate returns and that you can implement more rapidly. BSkyB, for instance, has built a major revenue stream from providing telephone and broadband services for its customers using many of the assets and relationships it already possessed. Where could you use your existing assets and capabilities to create new revenue for your business?
- Invest in partnerships. The high levels of turbulence in most markets, more rapid product life cycles and the surge in technological developments make partnerships a critical element of any growth strategy. As the U2 song goes, Sometimes You Can’t Make It On Your Own, and it is often better to share the rewards (and the risks) of new revenue streams with partners than it is to risk missing out altogether on new opportunities or go-it-alone with unacceptable levels of risk. Procter & Gamble now has a targets over 50% of new product launches from ideas and technologies sourced from outside the company. The company believes that its “Connect + Develop” open innovation platform will deliver $3 billion sales of additional annual sales. Where could you use external partnerships to accelerate growth?
- Relentlessly reduce the costs of complexity. A key and often-unseen driver of your operating costs is the inherent complexity of your business organization. Complexity comes in many forms, including the number of product or service lines you offer, excessive management layers, lengthy and involved decision-making processes, unclear accountabilities and limited ‘elbow room’ for managers to lower costs, drive performance, a large number of corporate objectives and programs, and too many performance measures. What opportunities do you have to reduce complexity to drive down your operating costs?
© Stuart Cross 2010. All rights reserved.