The second in a series of four articles on key factors in business growth.
In this article we’ll explore leadership mindsets that limit growth and suggest ways to move beyond them. For our purposes, leadership is the level in the organization responsible for the profit/loss of a business. Leadership also provides guidance and direction to growth teams usually comprised of business, marketing, and technical managers controlling budgets and allocating resources.
Our work with teams has identified 3 common leadership mindset challenges
- Too Little, Too Late – Ignoring the time factor
- Fear of the Cannibals – Perceived risk of losing control of the current business
- Stuck in Today – Inward focus, insular, silo structure
These challenges are often found in tandem, and are not independent of both skillset and toolset issues. Fortunately survey tools and workshops can help leadership identify their growth orientation, see how their mindset impacts growth and facilitate making appropriate changes.
Addressing the Three Leadership Mindset Challenges
Too Little, Too Late – Many projects take too long from concept to commercialization. Resources and people are spread thin. The traditional stage gate process itself, can be unwieldy. One team said, “It takes longer to get a meeting with the growth board than it does to do the work necessary to meet the stage requirements”. This team counted 57 elapsed days waiting for meetings to get through the first two gates vs. about 55 elapsed days of actual work time. The project was eventually rejected for fear of potential cannibalization of existing products.Later a competitor entered the market with a new offering similar to, but not as robust as the one rejected.
You can overcome this mindset challenge by:
- Prioritizing your work. Resource to win, and reduce the number of projects to those that are most critical to success. The key is to require robust project charters with clear goals, defined business impacts, resource requirements, and success criteria. The quality of the concept description is a good barometer. If you can’t describe it, then you don’t have a valid concept.
- Simplifying your process. Leaders tend to add to processes over time versus simplifying them – leaning them out. You only need three decision points:
- The first- after a robust market validation to clearly define the opportunity for the facts enabling the business case
- The second – after business case generation leading to product development
- The third – following product development, leading to launch
Utilize coaches rather than process facilitators. Coaches take less time, cost less, and focus primarily on content and getting results. And, over time, they transfer learning to the team enhancing organizational capacity.
- Utilizing multi-functional teams, particularly inclusive of the technical and commercial functions. Often, time is lost due to poor communication between technical and marketing teams.Join them at the hip and save valuable time. Increase the project leader’s communication efficiency by providing direct access to decision makers- one of whom should be the team’s sponsor. Decision makers should be aware of challenges and solutions before reaching decision points. And teams need to know the issues that must be addressed with facts.
Fear of the Cannibals: Many times, growth initiatives fail at the same time businesses begin to lose growth, share, price, and position. Leadership focuses on the existing business in an attempt to forestall the tailspin. Growth resources evaporate and budgets are trimmed to a bare minimum. The fear of product cannibalism takes on an even greater role in influencing business decisions. The key here is to innovate with fewer, safer, faster, and simpler projects. Forget the homerun and start hitting singles! Demonstrate you can grow again.
- Focus is king. Prioritize on the basis of speed, agility, and simplicity. Select the top few projects you can afford to resource for success. Generate charters that reflect the new growth strategy. Set tight timelines. Get technical teams on board to help set product specifications that can be developed quickly.
- Invest in high quality upfront market validation. You need to get it right the first time. It is critical that you get a good understanding of value (the price they will pay) and impact on your existing business during this part of the process. Build your business case before investing in any technical development. Don’t waste precious resources. Evaluate the impact of the business case on your strategy.
- Involve key customers early. Risk the fear of disclosure for early adoption. Accelerate ramp-up by using your sales force and key distributors more aggressively. This is an effective offensive weapon against the price pressures of the tailspin. Move your project teams on to the next offering quickly. Repeat, repeat, and repeat until you have blunted the erosion, and then begin to engage the bigger ticket, longer-term opportunities.
Stuck in Today: Inward focus happens when leaders orient themselves only to their current business model. “We know who our customers are, what our customers want and what they’ll pay for. If something changes, they will let us know”. This head-in-the-sand attitude is one of the most difficult to address because it assumes your customers are in the same place you are- and if not, they will let you know so you can react. Leaders who behave this way don’t recognize they have a problem until it is too late to act. An outgrowth of inward focus is an out-of-sync organization that doesn’t share information across silos and competes with internal groups more than business rivals. This results in misaligned priorities across the business and slow reaction to marketplace change.
- Recognize that you may not know what your customers need. Are you focused on what the ultimate end-user of your products or services really wants? If your customer is not the end-user you’ll need to learn about the broader market’s unmet needs and aim your value proposition at your customer’s customer. Address current gaps in your customer’s value proposition. Do not fall into the trap of creating new products until you have validated the market demand with analytics.
- Open your thinking. Open your business to new and different models including building more service into your value proposition. Understanding real value is fairly straightforward. Begin with interviews that look at the outcomes customers want to have as a result of purchasing from you, and focus on adding value to all your customer touch points- not just the product or service.
- Incorporate a “market-back” entire organization. Break away from product-forward strategy limitations. With a business orientation driven by specific markets, resource allocation can be more clearly defined. Additionally, with well-crafted charters all team members will know their role in achieving a common strategy and innovation process. Drive decisions with an emphasis on meeting customer values, how you go to market, and how you position your business in the competitive landscape.
In the introductory article of this series, we examined the three drivers of business growth: Leadership Mindset, Organizational Skillset, and Operational Toolset. In our next article we’ll explore Organizational Skillset in more detail as a basis for successful growth. Stay tuned!