Growth and expansion are the Holy Grail and wine of the business world--every CEO looks for production, revenue or penetration graphs that point up and to the right. Adapting at the same rate as the market (that is, customers) is the key to getting to that goal.
But guess how many companies actually do that well.
More often than not, customers change far faster than businesses do. John Marshall, Chief Strategy and Innovation Officer at Lippincott, says that companies who eat their customers' dust often are operating under mistaken assumptions. To him, growing at a different pace is a relationship problem.
"Customers don't care about products," Marshall insists. "They want solutions that save time and money and make life incrementally easier. Companies' digital futures will depend on emotional bonds, and those bonds are created through a deeper human understanding. Companies that are not ambitious, deeply personal, inextricably connected or relentlessly experimental are the ones that aren't keeping up with the rapidly changing customer."
What's catching the eye of your customers
If you see a good relationship as critical to keeping customers and companies on the same growth page, technology is a lot like the cool, strong, better looking kid cutting in at prom. Customers love a good dance with tech and pay attention to it because digital offers a path to the ease of life they're looking for. If you address technology the wrong way, you'll lose your date.
"The big technology and customer shifts don't just bring about a new or better customer experience," Marshall says. "They bring about fundamental change in business models. And ten years from now, new technologies will bring about business design changes that are even more profound. Blockchain won't just make transactions more reliable and efficient; it will enable peer-to-peer businesses that bypass intermediaries and potentially make scale economies a thing of the past for many activities. The Internet of Things, or 'IoT', won't just make our products smart and connected, it will enable a wealth of service businesses built to guarantee outcomes. Companies need to think deeply and strategically about what these changes portend for the fundamental underpinnings of their business designs."
In general, Marshall says that, because it's so hard for companies to retool products, rethink distribution and move and motivate people at the same pace as consumers adapt to innovation, businesses tend to grow in a linear arch. Customers, by comparison, adopt change exponentially.
How to know you're falling behind and get back on track
Marshall identifies three questions you can use to figure out if your pace matches that of your customer:
- What portion of my management time is spent focused on selling and optimizing products that exist, as opposed to finding "non-consumption"--and inventing what doesn't yet exist?
- Are my customers starting to "hire" new alternatives for the jobs they are trying to accomplish in their lives?
- Do I know what new solutions they are beginning to experiment with?
Once you've answered these, ask yourself
- What customer problems do I want to solve over the next decade?
- What shifts matter most to my business?
- What shifts will significantly challenge my current business model?
- What shifts will open up new markets that don't exist yet?
Marshall says that, once you've done this self-analysis, you need to develop not one, but two tracks of innovation to keep up. The first or "A" track" involves the activities that sustain your core. The second or "B" track involves the efforts that enable new business design creation. It encourages curiosity, experimentation learning and, yes, even failure. Both tracks require separate management, measurement, funding and staffing.
With competitors lurking like sharks under your surfboard, matching your customer stroke for stroke gets you back on safe ground. Don't be afraid to shift your weight and restructure based on what's going on with technology to make that happen.