I had a great conversation with one of my favorite clients last week that I wanted to share with all of you. I had just completed our Demand Creation Selling Bootcamp and as we were debriefing, the CEO asked me: “Doug, how precise do we have to be to be successful?”
My response was, “Well, it depends on what game you want to play and how you define winning.
“If you want to win the member-guest tournament, that requires one level of precision. Want to win on the Nationwide Tour, well that requires another level. Want to win a PGA Tour event, a major, several majors?”
He got the point. When we shared this conversation with his sales team, I asked them, “At what level do you want to play? At what level do you want to win? Are you working that hard at mastering your craft?”
So, I ask you:
- At what level do you want to play?
- At what level do you wan to win?
- Do you believe you can play and win at that level?
- How hard are you working at it?
I was speaking with a group of CEOs in Detroit today. The speaker before me had been discussing the typical business cycle: envision – growth – mature – decline – envision – etc. As I was talking about the keys to creating demand, I commented that I don’t believe that the traditional business cycle is a requirement. I believe that it can, in fact, be broken. I shared that my business cycle looked more like this: envision – growth – mature/envision – growth – mature/envision – growth – etc.
I asked the group, “while companies typically wait for decline before they take the envisioning and new growth phases seriously, why couldn’t they envision the next, potentially disruptive, growth cycle while they were in the growth or mature stages of the traditional cycle?” I shared how companies like Intel do exactly this – they strive to make their offerings irrelevant while their current offerings are highly profitable, not afterward.
One CEO challenged me, asking if there doesn’t come a time where a business can’t envision and trigger a new growth cycle before the decline. He asked if there weren’t many cases where a business needs to go through the decline stage and the cutting and retrenchment that goes with it, while it creates new markets and new offerings allowing it to potentially grow again.
I responded that a) growth by no means is a guarantee or an entitlement to business. Certainly times come where the fundamental purpose of a business is no longer relevant and growth fades and disappears – trees don’t grow to the sky and neither do businesses. I added that b) if a business stays maniacally focused on who its customers are and continues to build a deeper and deeper understanding of their customers, they can reinvent themselves before the decline happens.
I believe that this answer is on-target 95% of the time. As I’ve had more time to think about the question, I realize that there is a third part to the answer. If a business is in the growth and early mature phase, and is unable to envision the next growth and maturity phase, then it is time to sell the business.
This is true for two reasons. First, it is at this point that the business is at it’s highest valuation and is the most attractive to buyers. Of course, the buyers are not necessarily wise here, but that’s not the seller’s problem. Second, the seller (or the investors) would be far better off taking money from a sale and reinvesting it in another company or set of offerings that are in the envision or growth stages.
There are only three reasons that a business doesn’t follow this advice:
- The misguided belief that a business can create the next growth business while “milking” the decline cycle.
The reason you can’t do both is because the declining business eats your resources when the new growth business most needs it, and the declining business diverts attention and focus when the new business most needs your attention.
Even though the declining business is declining, it will still represent more revenue – and even profits – than the growing business. This makes it the master. So while you’re balancing the needs of the declining business with the needs of the new business – two types of competitors take you out. The upstart, who has no declining business to worry about; or your other established competitors (or worse yet the one who is consolidating the industry) who’s dedicated to the cash cow. Just take a look at Merrill Lynch (before being bought by Bank of America), Time Warner, or Dell to see how this game plays out.
The time to focus on the “next big thing” is while you are experiencing success, not when you are struggling. Please don’t misunderstand this point. If the next big thing is not directly aimed at your current core market, then it’s a distraction and you should follow the third part of my answer – sell. If you master the first unbreakable rule for creating demand, which requires a maniacal focus on knowing and understanding your core market better than your core market understands itself, you can initiate new growth cycles while you’re in the current one.
I had a fascinating conversation with the CFO of one of our clients today. We were talking about whether all the recent news about the economy was indicative of a bottom, and if it were, what a recovery would look like.
I shared with him my insights that the biggest danger about the recovery is that while executives are intellectually acknowledging that this recovery will be different from any before, most of them are still acting as if the recovery will mirror past recoveries (albeit not as fast). My opinion is that the faster executives understand that tomorrow’s rules will have little to do with yesterday’s, the healthier their businesses will be.
Simply put, if you are expecting the same customers to buy the same stuff, you’re in for some heartache. If you’re expecting the pricing for your traditional offerings to rebound as the market recovers, you’re in for some bad news. If you’re expecting that the same thoughts, strategies and actions that led to results yesterday will lead to those same results tomorrow…well, good luck.
The most valuable commodity in the executive suite today is intuition and a willingness to experiment. Unfortunately, most suites are going heavy duty of rational thought, attempting to “think things through.” The only way to succeed today is to manage disruption – both the disruption you are bringing to the market and the disruptions that the world is bringing to you. This is not a new thought, by the way, as almost 20 years ago, Jack Welch of GE fame, said, “If the rate of change outside your organization is greater than the rate of change inside your organization, your organization is in trouble.”
The challenge is that it is a completely natural desire to bring rationality to the table. As a matter of fact, if you don’t “think things through,” it feels like you are more likely to miss something. Also, during the industrial age, managing processes was the critical success driver. Management requires rationale, linear thinking. Management is about dealing with the known.
Today, however, the keys to success are disruption and transformation. By their very nature, disruption and transformation eliminate the realm of certainty. When you take the thought approach designed to manage certainty and apply it to inherently uncertain stimuli, the natural result is paralysis and inaction.
The bad news today is that all the experience and the lessons you’ve learned in the past have very little correlation to your potential success tomorrow. The good news is that the future is completely yours, you no longer have to be limited by your past.
The choice you must make is whether you want to be paralyzed, or liberated, by this reality.
I recently wrote about the television show House and how the arc of the show is a great metaphor for what it takes to grow. Last night, I was watching an episode, and one of his apprentices froze because they were afraid that making a mistake could worsen the patient’s condition, and possibly even kill him.
House moved forward with the treatment, which turned out to provide the insights he needed to solve the mystery. A dialogue went on between House and the apprentice. The essence of the conversation was that the apprentice asked House, “How can you keep doing what you do when you know you could be wrong – and being wrong could kill the patient.”
House responded: “Being wrong could kill the patient, being afraid to be wrong will kill the patient.”
Wow! I thought. That nails business on its head, in any market – but especially in bad markets. Today, I see executive after executive frozen, fearful that they could make a mistake that could kill their business. The fear is well founded. Business is always risky, and it’s especially risky today. Questions like, “will customers buy this,” “can we deliver on the promise,” “how will we sell this,” and “can we make the changes internally to make this happen,” are all reasonable and appropriate questions. Failing to have the answer, however, is no reason to slow down the implementation. These are all questions that need to be answered, as you are changing – not before.
Pick a course of action, get to work – and then make the quick adjustments you need to make, communicate clearly and execute. Today, making a mistake could hurt your business, and the fear of making a mistake will kill it.
“The road to hell is paved with good intentions.” – Samuel Johnson
Merely intending to do good, without actually doing it, is of no value. In customer service, it may even extract value.
As I sat down this evening to do one of my least favorite things (pay bills), I was required from Bank of America that I needed to change my online ID. While it was an interruption that I would have preferred not to have had, I certainly understand and appreciate the need for security, so I went with the flow. Needless to say, it did not go as smoothly as I would have liked or expected.
In the midst of my struggle I was greeted with what looked to be a terrific customer service addition (I was even going to blog about it). A pop up screen offered a live chat sessions from a service agent, asking if I needed help. Pleasantly surprised, I clicked yes, filled in some information and got this:
How could I get a computer generated offer of help, only to be told, “Whoops.” Here is (yet another) example of a gratuitous effort at enhancing my “experience.” I don’t want to sound ungrateful, but I’d have preferred that I not have been offered the help. I wouldn’t have been upset if I hadn’t been offered it, as I didn’t expect it.
This act is symbolic of the dangerous mantra – Exceed expectations. Look, stop trying to exceed your customer’s expectations and start a) clearly communicating them, then b) meeting them. If you can create predictability, you create value. And who knows? Maybe even loyalty.
A news story quotes Jeff Zucker, NBC’s CEO, as questioning whether NBC could continue to program a full 22 hours per week of prime time. Another story announces that NBC has signed Jay Leno to do a nightly show from 10-11pm (I guess that reduces NBC’s need for programming to 17 hours). Also, news came out that the Tribune company has declared bankruptcy.
Wow! How the mighty have fallen. I understand that there are multiple causes for this, and I certainly don’t want to be guilty of throwing too simple of an explanation for such failures, but I can’t help but draw the conclusion that at the heart of all of these challenges is the failure to create any relevant value.
I remember when NBC epitomized “Must See TV.” NBC used to be innovative – they brought us Cheers, The Cosby Show, LA Law, Hill Street Blues and ER. They had the patience to allow Seinfeld to find an audience and the wherewithal to cut Hill Street Blues and LA Law when they were losing their plot. Today, they bring us two hour specials of Celebrity Apprentice, they’ve allowed ER to go beyond stupid to sublime and their idea of creative programming is to let Deal or No Deal run 3 – 5 times a week. Now, they’re going to turn over their 10 o’clock hour (the hour where NBC used to be its most creative) to Jay Leno.
No offense to Jay Leno (one night a week might even be very entertaining), but where’s the creativity and originality? Where’s the imagination that GE brags about in their advertising? Where’s the focus on customers (viewers)? The same can be said of the newspaper business – they’ve utterly failed to embrace the world the way their customers want it.
The more I read about businesses that are struggling, and the more I work with businesses that are thriving, the more I realize that if you just make sure that you solve a unique problem your customers are facing and stay focused on them, then you can bypass these things we call “recessions.” Take some positive action today and find a new problem you can begin to solve for your customers.
One of my favorite television shows is House. For those of you not familiar with it, it focuses on anti-social, medical genius, Gregory House, MD. House is a diagnostician, and every week, a new patient presents an extreme riddle as to what is wrong, and typically what is threatening their life.
House is opinionated, arrogant, and obnoxious (and those are his good qualities). He is also wrong, but never in doubt. Anyone who watches the show knows that however confident House may be, if there are more than 10 minutes left in the show, he will be wrong. In a typical episode, House is wrong 4 – 6 times, before he finally figures it out.
Now, the show House may be an unusual topic for a blog that promises insights into fast and profitable growth. The reason I mention it, is because House is a great metaphor for how companies must act when they go to market. Here’s how:
|Despite his foibles, House understands that the only “reality” that matters is the patients anatomy. His opinions, the opinions of his staff or administrators – in the end – doesn’t matter.
||The fast growth executive understands that the only opinion that matters is the market’s.|
|No matter how many times he’s “failed” – House always takes action confidently.
||The company that makes the most mistakes – fast, and fixes them – confidently, is the one that wins.
|No matter how confident House is, he is always testing his assumptions and never lets his “tests” get in the way of action.
||The successful fast growth company is always prototyping and “listening” to the market.
|House learns by failing – realizing that the only failure is to give up.
||To often, companies want to “figure it out” before they begin, not realizing that the only way to “figure it out,” is to begin. The key to growth is action – not thought.|