A market segment is a “cluster of customers with similar needs.” Most B2B companies fail to focus their resources on those segments that are winnable and worth winning. They don’t follow the #1 lesson of war: “concentration of force against weakness.” Instead, they spread their forces too timidly and evenly.
More in article, How’s Your Market Segmentation?
“Market Growth” is the tide that lifts all boats… your reward for being just average. “Inherited Growth” comes from great products developed long ago. These are the gifts that keep giving… until they don’t (when you’ve been commoditized). The only one you control is “Earned Growth,” when you understand and meet customer needs better than anyone else.
More in article, The Inputs to Innovation for B2B
Any champion—a golfer, chess master, or rock climber—focuses on building their capabilities. Yet, many business leaders obsess with “results,” hit the reset button at year-end, and start all over again.
Use this free diagnostic to benchmark your growth capabilities, and chart a multi-year improvement plan.
I’ve come to believe two principles: A) The only way to create customer value is by improving their important, unmet outcomes. B) A supplier’s only path to profitable, sustainable organic growth is in creating customer value. Do you agree? If so, you might want to place a very high priority on understanding which customer outcomes these are.
More in article, The Inputs to Innovation for B2B
This original research by The AIM Institute investigates 24 possible growth drivers… and the views of over 10,000 years of professional B2B experience on their growth impact. Bottom line: Most companies want to put more emphasis on understanding customer needs in the front end of innovation.
More in research paper, What Drives B2B Organic Growth?
Decades ago, Stephen Covey explained we need to balance “P” (production) against “PC” (production capability). Today many companies just focus on this year’s results (P), without building the capabilities needed for future growth (PC).
There is a natural law of harvesting: sowing and reaping. And the sowing must come before the reaping. When we don’t understand this, the “P PC Balance” will make that profitable future difficult to achieve. Jeff Bezos has taught that this year’s profits have to do with the work done years ago. Further, we know that we need our PC to contain the core components of tools, processes, and people.
“P PC balance” must consider the tools required. Tools increase efficiencies. They reduce errors. The modern B2B firm must understand how to leverage tools to its advantage. From voice of the customer software to web conference services, this is not a place to pinch pennies. Let’s also get more sophisticated about the language of finance, which is how success is measured.
“P PC balance” must consider the processes. For example, we must know how to allocate resources. That is, we must optimize the risk between risk and reward with our portfolio management system. We need our stage-and-gate system to keep development marching along. And we need processes for pursuing riskier investments, or, we’ll look at our new initiatives – and find that they are all incremental in nature.
And last, but certainly not least, “P PC balance” must consider people. They are the most important assets a firm has. And yet, how often, during tough times, do we see massive layoffs? How often to we watch knowledge and experience literally walk out the door. Fail to maintain the talent level and bigger failures are sure to follow. And don’t just keep them, but invest in their learning and careers. There should be a high degree of alignment.
There is no doubt that there’s tremendous pressure on executives to perform. But don’t just hit the reset button and start over again every year. Sell the vision, sell the process! Build the future that you (and your firm’s investors) want.
More in article, B2B Leadership: Time for Greatness
No team wants to waste time on a loser: Life is too short. So if management has to stop a project, the team was inexperienced, communicated poorly, or had different expectations than management. All these ailments are addressed by requiring every team to use a common business case template, not their own, start-from-scratch PowerPoint® presentations.
More in article, How Leaders Can Accelerate New-Product Development
On average, you and your competitors will grow at the same rate as the markets you serve. Don’t feel entitled to this. If a competitor develops a blockbuster, you’ll be happy to minimize your sales decline. Thinking otherwise is like 1970’s Detroit auto-makers assuming Japanese competitors would keep producing junk.
More in white paper, Catch the Innovation Wave (page 15).
New research shows huge financial benefits realized by companies exhibiting long-term behavior. And yet, short-termism often prevails. Here’s the reality: your financial results today are just the future someone else created years ago. Isn’t it time to make your career a participant—not spectator—sport?
More in article, The Inputs to Innovation for B2B
Increasing shareholder value is simply the result… the “effect.” What’s the “cause”? It’s profitable, sustainable, organic growth. Demonstrate this and stock prices will follow like goslings after their mother. Quit performing for Wall Street analysts, who have never created real value and couldn’t do so if their bonuses depended on it. Instead, work for customers who will appreciate and reward the value you create for them.
More in article, B2B Leadership: Time for Greatness
What initiatives is your business pursuing today? Lean… sales effectiveness… acquisitions… cost reductions? If your over-arching aim is rapid, profitable, sustainable growth—and it should be—see why these otherwise-fine initiatives may be distracting you and inhibiting the high-quality growth you seek.
More in article, Plan your B2B organic growth with this new diagnostic
Don’t let your future be “that time you’ll wish you’d done what you’re not doing now.” You’ll be thankful later if you recalibrate your time horizon now… diverting some of your short-term attention to the future of your business. Besides, what you do this quarter is largely a spectator sport. The prices, profits and margins we wring our hands about during financial reviews were determined years ago by the new products created then for customers.
More in e-book, Leader’s Guide to B2B Organic Growth (Lesson 7).
Long ago, clever employees at your company developed industry-leading products. Most of your growth and profits today probably come from these sturdy product platforms. Don’t count on inherited growth continuing: Every year, purchasing agents and competitors are working diligently to commoditize your specialty products. Glad I could cheer you up on this.
More in white paper, Catch the Innovation Wave (page 14).
If your business goal is to “maximize shareholder wealth,” you should change it. See why this lovely-result-but-lousy-goal works against your growth ambitions. Understand the 3 rules exceptional companies follow. Make it your goal to “understand and meet customer needs better than others.”
More in article, Why Maximizing Shareholder Value Is a Flawed Goal