How will leaders drive revenue growth, keep top talent and retain profitable customers in the face of global competition and an unprecedented rate of technological change? We suggest a review of your mission statement and your  actual business model. By the way, you may want to wander among your staff to learn what they are thinking; they often know more about where your business is headed than the leader does.

The three basic business models

The manufacturing model

In-house products and services determine what the company will produce and sell. Examples of this model are the old-line enterprises filled with 30-year-old printing presses, or automobile makers with expensive production lines. Nothing changes quickly. Attracting new talent to the business is a daunting task. This is your typical sunset industry.

The sales model

Sales and marketing determine which markets will be pursued and which solutions will be offered. This model was popularized on the vertical markets approach. It has been further entrenched by CRM software. Conflicts inevitably arise between sales and production, both believing the other is working at cross-purposes. In reality there is little different between the first two business models – both are internally driven.

The customer-focused model

This is a business approach centered on strategic thinking, primarily this question: what’s happening with your customer’s clients? This may sound as though we are stating the obvious, but consider a thorough study conducted by The Harvard Business Review.

Between 1988 and 1998, seven our of eight companies in a global sample of 1,854 large corporations failed to achieve profitable growth. Yet 90% of the the companies in the study had developed detailed strategic plans.” ~ The Office of Strategy Management – Robert S. Kaplan and David P. Norton

 

Elephants in the boardroom

Here are a few unmentionables that prevent most suppliers from communicating effectively with their customers:

  • The business review process of performance measurement is frequently irrelevant: most reviews look backward.
  • Running a corporation “by the quarter” for the stockholders is a recipe for disaster.
  • Carl Jung said it best when he said ” some problems cannot be solved; they can only be replaced”.
  • You cannot transfer production capacity without giving up your intellectual property.

 

How to develop a customer-focused strategy

  • Stop telling your story at customer presentations, no matter how compelling or well-crafted that story is. Instead, tell your customer what you have learned about them. This requires focused research and humility.
  • Plan for the complete displacement of every product and service you own to take place within the next five years – because your clients are planning for this.
  • Plan for the complete turnover of your customer base – again, your clients are planning for this in their own operations.
  • Dare to ask your clients about the most important issues facing them. Then determine how you can apply your resources to solving their business issues. This is the real application of mass customization.
  • Plan for the complete displacement of your employee base, which will include your own evolution.