Many successful businesses lose growth traction and become comfortable and content with their historical success. But yesterday’s success doesn’t guarantee a viable future. There is no place for complacency in a successful business.

So what do you do when you suddenly realise you are falling behind the market?

‘We Are Falling Behind’

It can happen to any business, no matter whom they are or what market they are in. Your business may be in a booming industry and you go out of business. Your success is 80% or more dependent on you and your leadership team, not the market you sit in.

It may be that your business is closely held and the energy and creativity that once existed is weakening or just not keeping pace. It could be the paradigms you hold true to are no longer valid in the changing world.  In closely held businesses, renewal is critical to keep the flow of energy and ideas fresh. There are likely only a few of you in the leadership team and it’s easy to fall into ‘group think’ or to allow a single founder/leader to dominate thinking and decisions.

When you get to the stage that you think your ideas are the only ‘good ones’, then you’re probably at serious risk of rapid decline.

If yours is a public company, then the arrival of a new CEO can either be a fresh breeze of renewal or the death knell event.  Your size and resources do not make your business immune to losing your market position and competitiveness. And it takes a lot more effort to change the course of a larger business or ignite renewal when complacency has set in.

Growing your business and identifying new opportunities is a continuous activity but if you find you need to pause, reassess and re-launch your business then you need a process to follow.

Here are my thoughts on what that process can be.

 

Where Are The Opportunities?

The first and most important point is that opportunities are about the future and not the past.

So what you have done and the successes you have achieved in the past are great but are not necessarily relevant to the future or the identification of new opportunities. Be conscious of the past, build and compound upon its foundations but be careful they don’t restrict your view of the future and what it may bring.

Opportunities just don’t jump out in front of you. You have to go searching and exploring for them. It requires an inquisitive mind, free of paradigms, to find them. And then you must turn those opportunities from potential into reality and create effective value for your customers.

You have to be actively exploring and searching and know where to start looking. I find the work of Amar Bhidé, now a Professor at Tufts University, to be a good guide. His 1994 article,  ‘How Entrepreneurs Craft Strategies That Work’, published in the Harvard Business Review, remains for me the most accurate reflection of where opportunities are hiding, waiting to be claimed.

Bhidé in his research noted that entrepreneurs found the ideas for their businesses in the following ways:

• Replicated or modified an idea encountered through previous employment (71%).
• Built a temporary or casual job into a business (7%).
• Wanted a service/product as an individual consumer (6%).
• Swept up in the personal computer (PC) revolution (5%).
• Happened to read about the industry (4%).
• Discovered through systematic research for opportunities (4%).
• Developed a family member’s idea (2%).
• Thought up while on holidays (1%).

The vast majority of entrepreneurs discovered the idea that seeded their business through their everyday work. They saw what for them was an obvious opportunity that their then-employer could or would not see – an unmet client need that they chose to build into a new business.

So you start looking within the business and the customers who are in front of you every day. It is easier and far stronger to build from your existing customer base and product/service profile than to try and find something totally new and seed that into a new business.

As a growth strategy, you grow from your core outwards in an ever-expanding circle. In what direction that circle grows will be dependent upon how you view your customers’ future needs and the opportunities they present to you.

 

Other Thoughts On Finding Opportunities

Norbert Schwieters and Bob Moritz in their article, ’10 Principles for Leading The Next Industrial Revolution’, published in strategy+business, list ten approaches for standing out in our digitalised world.

They believe that the historical approach of viewing growth opportunities as a value chain is losing its relevance, and that ‘the Industrial Internet presents unprecedented potential gains for companies that claim leadership roles’. The opportunities will present themselves but you must be ready to step up and claim them.

They go on to explain that the rise of digital technology will continue to enable businesses to connect outside their traditional value chain and deliver more efficient and effective products. It will also reduce the need for economies of scale and conventional divisions of labour, which have been previously necessary for efficiencies to be won and retained.

Schwieters and Moritz’s ten principles are:

• Rethink your business model.
• Build your strategy around platforms.
• Design for customers.
• Raise your technology acumen.
• Innovate rapidly and openly.
• Learn more from your data.
• Adopt innovative financing models.
• Focus on purpose, not products.
• Be trustworthy with data.
• Put humanity before machines.

Matthew Heimer in his article for Fortune magazine, ‘How a Second-Place Company Can Be a Winner’, believes that you don’t need to be number one in a marketplace to be successful. He has four tips for the number two players to establish themselves as a viable alternative:

• Declare yourself the underdog and win public favour, and greater customer loyalty, for you to succeed.
• Find your niche and doing something the number one is not doing at all or doing particularly well.
• Be the ‘late’ mover, avoid the mistakes of the first mover and improve on they have done.
• Compete in a different field rather than imitating, and move into categories number one is not in.

Each of these articles brings a different perspective to the task of recreating your business. Schwieters and Moritz highlight the fact that changing technology will always present opportunity, and Heimer notes that you don’t have to become number one in a potential market to make it viable and worthy of your attention.

But the most important consideration in locating opportunities is to ensure they are in markets in which you can be competitive. This is the foundation hurdle that any opportunity must first breach.

 

Don’t Forget The Rules For Competitiveness

In looking for opportunities, each opportunity must be assessed against the core principles of competitiveness. The opportunity must be:

• Founded in a purpose that is aligned with customer need.
• Developed with a competitive posture that will allow you to deliver greater customer value than anyone else.
• Whose offering is built upon the strength of the competitive engine of your business.

In applying these principles to your search for new opportunities, the implications are:

• You need to clearly understand where your unique business strengths lie, as you will need to leverage these to develop a competitive posture that will allow you to deliver more value than anyone else.
• To identify the best opportunities, you must intimately understand your customers’ future needs and ensure they are aligned with your business’s purpose for existence. Alignment will support a deeper understanding of need.
• Your business must be designed to deliver the customer value the opportunity requires to be successful.

If the opportunity you are considering doesn’t meet these criteria it is unlikely that you will be competitive in this chosen market.

 

Customer Personas May Be The Answer For You

You are probably aware of the use of ‘customer personas’ in digital marketing. It’s where you develop a detailed picture of your customer. You give them a name, describe them in detail, where they work, shop, their family, their likes and dislikes, what they read, what their fears and aspirations are and so the list goes on.

Customer personas can be very useful in identifying future needs and the opportunities these may represent for your business.

Here is how you create a diagram – like a mind-map building from the centre out – which reflects your customer and their changing world:

1. Create the persona for your core customer group, that is, your existing customer. Remember what I said above, strongest growth comes from growing out from your core.
2. Identify the key attributes from that persona, which may influence needs and list them out in the centre of your mind-map.
3. Ask yourself what is changing in the customers’ world that will influence these attributes, such as technology, scientific advancements, consumer preferences, community views and so on.
4. As each agent of change comes to mind, map it and describe what the impact will be and continue to extend on this by identifying likely implications.
5. The richness of your diagram should grow as you begin to build up a picture of your customer and what is changing in their world – note, their world, not yours.
6. And finally you should keep asking: where are the opportunities that align with my strengths and my business that will allow me to grow and deliver more value to my customers?

The use of customer personas in this way should help you step into your customers’ shoes and discover what they may want in the future.

 

Questions To Prompt Your Thinking

Hopefully, if you have created a customer persona, as outlined above, you will have a clear representation of where your customers’ needs are moving toward.

Here is a list of seven questions that may also assist in identifying opportunities in your business:

1. How would do you describe what your business does from a customer viewpoint and the reasons they come to you?
2. What is it that you do better than anyone else in your industry?
3. How do businesses in your industry presently compete and what features do they compete around?
4. Do those features match the real future needs that customers are seeking to have fulfilled?
5. Where is growth likely to occur in your chosen market in this changing world?
6. What are your customers’ needs today and how are they going to change?
7. Where can you use your unique business strengths to exploit the emerging opportunity and reinvigorate your business?

 

Recreate Your Business

As a final point, to ensure your business never loses growth traction again, it is necessary that you craft a business that is always evolving, stepping out and leading its market.

The ability for your business to be able to do this will depend on a range of factors but principally leadership, culture and the way the business views success. Some of my previous articles, Choosing Worthy Leaders, Cultural Problems? You’re Likely The Cause, and Success Is The Fuel Of Life, may assist you in getting a handle on these aspects of recreating your business:

Suddenly recognising that your business is slipping backwards is never pleasant but there is always the opportunity to recreate it for the new world that has emerged. It will require you to become adaptable, strong and resilient but all these outcomes can be achieved if you focus on developing the right traits in your business.

 

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Active Knowledge Questions:

In your business, are you continually searching for new opportunities for growth? Are many of these identified by employees and not on your senior management team?

How many of their ideas for growth have you acted on in the last six months?

 

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Act Now:

Need to lift the leadership performance in your business? Learn how in C88 – Leadership Performance Guide and Journal.

Or do you need to rework your business strategy? Take a look at Strategy Play – Crafting Undefeatable Business Strategies.

Want to become part of the Entrepreneurs+ community? Sign up for my eNewsletter, and join the conversation by sending me a question via Ask Richard.

 

All the best in the success of your business,

Richard Shrapnel