Opportunity is energy.
The potential for achieving growth takes our attention and encourages us to work together to support the business reach the goal. But in following the success we envision, are we missing the greatest opportunities that will generate the most impact?
In our work with Atlantic Canadian business leaders, we found the focus was fully on revenue generation. Based on the year that we have just experienced, attention on sales is not unreasonable. Leaders felt if they could unlock the potential opportunities within revenue generation, the future would be assured. The positioning for growth was for focused execution, building on past successes, and using current capabilities.
Innovation was met with ambivalence and productivity was felt to be the greatest strength in supporting businesses to accelerate and scale their revenues.
However, leaders had the lowest confidence in the capacity to influence revenues. Business owners believed they had less than a 20% impact on the ability to move the revenue needle for their companies (as compared to 29% for innovation and 46% for productivity). Yet, this was the point of inflection, figure out how to win here, and future success would fall into place.
Leaders indicated the greatest opportunities for their organizations to succeed all rested within the revenue line. Being able to effectively use marketing to convert prospects to customers realized a 36% boost in confidence, while building an active pipeline of new business leads provided a 33% increase, and exploring new markets to build sales gave a 27% gain.
We firmly believe focusing our attention on sales is the key to unlocking future growth.
At the same time, the highest level of disagreement in setting strategy also rested with how to grow revenues. Leaders disagreed widely on the best direction and decision to position their companies for earning potential.
The focus on revenues is against the research that points to three other opportunities as having a greater likelihood of positioning a business for outperformance. Studies by Bain and Company and the Boston Consulting Group highlight three factors that have been proven to add three times more than other strategic positioning choices to the bottom line: partnering through acquisitions and investments in other companies (far and away the highest return), creating innovation around shifts in customer and market trends, and building an inclusive and diverse culture.
Each of these proven steps requires ongoing attention and change – and our research with employees found that people rank the ability of the leadership to support change to be 68.8%. That means one-third of people do not believe the company can make the shift.
At the core of the success of all businesses lies the customer, and the ability to provide relevant value that resonates with what the customer needs. In our work, we found 36% of employees did not understand the customer value proposition of the business, the basis for all growth.
The real opportunity for businesses to strategically position their companies for growth is clarifying and understanding the value created for their customer, being focused on the job the customer is doing and meeting the needs as they shift and change. If businesses are fully in tune with their customers, evolving to meet changing patterns and trends, the right moves would be made to support revenue generation.
It is interesting to note that for the 20% of companies that outperform, in good times and bad, there was a clear and enduring focus on the customer. And their inclusive and diverse cultures provided needed perspective and experience to understand and appreciate the shifting trends in the markets that affect their customers. Their focus on innovating around those shifting needs kept them ahead of the market and positioned them to be ready in the right spaces. As well, the investments made in companies acquired worked best when they fit the needs of their customers.
And in companies where the customer value proposition was clear, the readiness to change was 25% higher.
Peter Drucker had it right, businesses exist to serve the customer.
We can strategically position our companies to be competitive and profitable based on focusing attention on having everyone within the organization understand the customer job, the needs of the customer in performing that job, and the value the business creates to meet those needs.
With a solid customer value understanding, people find their work more meaningful and increase their engagement and performance. The strength of the people come through to the organization, supporting the changes to move the business into a position to step ahead of the market. A business aligned around customer value is one that builds enduring success.
Revenue generation takes our attention as there is the most noise around this aspect of our business. But beneath the buzz is the real issue – understanding the customer, the shifting landscape they face, and how we can respond and create greater value for them. Inclusive diversity, innovation around customer needs, and acquisitions that enhance the ability to create customer value will accelerate and scale revenues more than other opportunities.
The opportunity is always with the customer, cut through the noise, and the real positioning strategy is there.