Rethink your major initiatives

Transcript of Chapter 8

What major initiative is your business focusing on right now?

There are many to choose from. You might be pursuing productivity increases… or quality improvements… or cost reductions. Perhaps new sales training or building customer intimacy. How about global expansion… acquisitions… or something else?

These can be excellent initiatives, but you should never let them be the main show. As Steven Covey said, the main thing is to keep the main thing the main thing. And the main thing is market-facing innovation.

Why? In earlier chapters we said that rapid, profitable, sustainable growth is what pleases shareholders, impresses customers, and gives employees stable, rewarding careers Only market-facing innovation does this. All the rest miss the target of rapid, profitable, sustainable growth.

Productivity can improve profitability, but it’s not about top-line growth… and you eventually reach a point of diminishing returns.

Same with Quality—which is the price of entry today, and has little impact on demand.

Cost Reductions are like productivity increases, but sometimes with harmful long-term effects.

Sales Training can boost your revenue… and lead to better pricing. But if you don’t keep delivering new value to customers, this runs out of steam.

Same with Customer Intimacy. They may love you, but B2B customers need new value from their suppliers to compete.

Global Expansion hits the revenue line and may boost profits. But we’re running out of developing regions to expand into.

Acquisitions will certainly boost revenue and perhaps profits. But if you don’t know how to grow the companies you acquire… you’re just building a house of cards

The common shortfall is a lack of sustainable, year-after-year, reliable growth. Not so with market facing innovation. As long as you understand and meet customer needs better than others, your growth will be rapid, profitable and sustainable.

In coming chapters, we’ll show you how to do this. You’ll see why you must focus on the “understand” part. Something most B2B companies do poorly.