The prospective approach can be particularly useful for new CEOs. At the end of that period, the findings were collated and analyzed. Among the discoveries: Employees had a vision of transforming the company from a service provider to a trusted adviser. That shift would require anticipating and responding to security issues instead of relying on the legacy methods of observing and reporting.
Our research shows that a compelling purpose clarifies what a company stands for, provides an impetus for action, and is aspirational. In those cases the purpose becomes nothing more than nice-sounding words on a wall.
Leaders need to think hard about how to make purpose central to their strategy. The two best tactics for doing that are to transform the leadership agenda and to disseminate purpose throughout the organization. Consider Mars Petcare again. In its president, Poul Weihrauch, significantly altered the composition and focus of the leadership team.
Revising a leadership agenda and restructuring an organization are arguably easier at a privately held company like Mars Petcare than at a publicly held one.
Neste faced an uphill battle when it decided to move into renewables. And forge ahead it did. The shift also raised a big question for Neste. How could it change its organizational mindset from volume to value selling—which entailed convincing customers that its clean fuels would be better for them in the long run? The new leadership team realized that a much higher level of collaboration among business segments and functions was imperative.
Aon Explores the World’s Most Pressing Business Issues
Winning deals was no longer the sole responsibility of the sales department. The expertise of the whole organization—product knowledge, marketing, finance, taxation—would be required to understand the specific needs of customers like airlines and bus fleets. Targets and incentive plans became cross-functional, designed to build capabilities both within and across businesses.
The process worked. Neste is now a leader in the renewables industry, and the world is starting to pay attention. In , for example, Google and UPS began partnering with the company to reduce their carbon emissions, as did several cities in California, among them San Francisco and Oakland.
Purpose can also help with the soft side of management—the people-related aspects of running a business, which so often prove to be the undoing of leaders. By putting purpose at the core of strategy, firms can realize three specific benefits: more-unified organizations, more-motivated stakeholders, and a broader positive impact on society. Unifying the organization. Why does a pet-food company need to develop a platform to support technology start-ups?
Why does an on-site guarding company want to provide electronic security services that could, over time, make the physical presence of guards redundant? Purpose helps employees understand the whys and get on board with the new direction. Motivating stakeholders. According to the Edelman trust barometer, distrust of government, businesses, the media, and NGOs is now pervasive. At the same time, more than ever, employees, especially Millennials, want to work for organizations that can be trusted to contribute to a higher cause. And when customers, suppliers, and other stakeholders see that a company has a strong higher purpose, they are more likely to trust it and more motivated to interact with it.
Broadening impact. Strategy involves exploring some fundamental questions. Why are we in this business? What value can we bring? What role does my unit play within the bigger portfolio?
Running a ‘storytelling brand’
Purpose creates a basis for answering those questions and defining how each unit will contribute to the organization and to society as a whole. This focus on collective objectives, in turn, opens up many more opportunities to improve growth and profitability today and in the future. Leaders need to constantly assess how purpose can guide strategy, and they need to be willing to adjust or redefine this relationship as conditions change. That demands a new kind of sustained focus, but the advantages it can confer are legion.
Thomas W. He is a coauthor of Ready? Charles Dhanaraj is the H. Tom Shearer.
- Redefine B2B marketing and sales strategies and grow your business.
- 5 Trends That Will Redefine Retail In .
- Report Abusive Comment;
- Discount business strategy : how the new market leaders are redefining business strategy - EconBiz.
- Browse more videos.
- Put Purpose at the Core of Your Strategy.
By asking what benefits the customer derives from a product, a company can identify its true value-added and define its business. Thus, instead of thinking of your business as the car business, it is better to think of it as the transport or entertainment business or whatever other function your product is fulfilling. A third perspective has emerged that argues that companies must think of their business as a portfolio of core competencies. Not one of these three approaches to defining the business is the right one; each has its merits and its limitations.
What is a good definition for one company may be bad for another. What usually kick-starts strategic innovation is not the adoption of any one of the three approaches.
Rather it is continual switching from one definition to another and continual thinking about the business implications for the company as it switches from one definition to another. The breakthrough usually comes when a company has a dominant way of defining its business, say, customer-driven, and suddenly begins thinking of its business in a different way, say, product-driven.
This is the process that a company should go through to decide how to define its business. Imagine the power of revisiting these questions every year or two — including a follow-up question: Have any changes occurred that make another definition of the business more attractive to our company? This is the source of strategic innovation. But, again, to discover a new definition, you must continually explore. Very few companies decide explicitly what business they are in, let alone think about how to redefine the business.
Yet this is the most important element of any strategy. Even the few companies that go through this exercise explicitly either fail to make a specific decision or, having decided what business they are in, fail to revisit the decision, believing that it is cast in concrete, never to be revisited. How many companies think about this question explicitly and proactively? How many have explicit criteria by which they judge every customer? More importantly, how many companies get rid of existing customers that they have identified as bad customers?
In terms of strategic innovation, the purpose of thinking strategically about this question is either to identify new customers or to resegment the existing customer base more creatively and thus form new customer segments. Many companies seem to believe that new customer segments emerge only when new customer needs emerge.
- "THE GROWTH BLOG" - A RESOURCE FOR B2B LEADERS, MARKETERS, SALES & SERVICE PROFESSIONALS.
- Strategy – Our latest thinking | EY – Global.
- Modern Recording Techniques, Seventh Edition?
- Love Songs from a Shallow Grave: A Dr. Siri Investigation Set in Laos;
- BIM: Finding New Ways to Grow.
- BIM: Finding New Ways to Grow;
New customer needs are certainly an important source of new customer segments and something that I discuss in more length later but are not the only one. Often, customer needs remain the same, but customer priorities change; for example, customers still need warmth and style in their overcoats, but, compared to thirty years ago, style has risen, for whatever reason, on the list of customer priorities.
Thus a company that identifies such changing priorities, not needs, can carve out a specific niche of customers who value style highly. Similarly, a company can identify a specific customer segment that competitors are not currently serving. The reason this segment is not served is not because companies do not know about the needs of those customers.
They may know the needs but have decided that the customer segment is not big enough to go after, or that they cannot serve this segment profitably. If a new company can serve this niche efficiently, it has a new customer segment at its disposal, not because any new customer needs have emerged but because the company has found a more efficient way to fill existing needs. Another way to identify new customer segments is by more creatively segmenting the existing customer base to put different segments together according to a new logic.
Discount Business Strategy: How the New Market Leaders Are Redefining Business Strategy
Recombination of customer segments may also allow a company to create a new need and grow a particular segment. My goal is not to make an exhaustive list of all possible ways a company can identify new segments. Rather, I suggest that new customer segments can be developed not only from new customer needs but in various ways. However, a company cannot identify new segments unless it proactively thinks about who its customer really is.
Inevitably, if a company identifies a new customer base, it will start behaving in a way that best satisfies the specific needs of those customers. This behavior will most likely be different from that of established competitors who are serving different customers.
M&A In A High-Tech World: Redefining Due Diligence
Thus the company will be breaking the rules. Consider, for example, the Canon case: Whereas Xerox leases big photocopiers to corporations through a direct salesforce, Canon sells its personal photocopiers to end users through a dealer network. Thus Canon has adopted a different product, along with different selling and distribution strategies. It is breaking the rules.
Related Discount Business Strategy: How the New Market Leaders are Redefining Business Strategy
Copyright 2019 - All Right Reserved