In a start-up, you typically have a great idea and enthusiasm, and then charge into the market headfirst creating your business as you go. In an established business, the challenges of birthing new opportunities can be far greater.

 

Active Knowledge Question:

In a well-established business, how would you approach bringing new opportunities to life?

 

The Challenges In Established Businesses

Growing an established business in today’s marketplace through new opportunities can be a real challenge. A successful, established business is likely to be entrenched in its view of the market, its processes, and practices. And because of these aspects, it is likely to be less innovative than other businesses.

Its success has locked the business onto a set of train tracks and it is charging ahead at full steam. To slow the train down and look at other opportunities can, at times, be almost impossible. The problem, of course, is that the train will run out of track at some point and by that time it will be too late.

The point being, if you are tasked with finding new opportunities, you must recognise this dynamic and create the right environment and space for opportunities to be birthed.

This environment and space are created through the following five actions:

1. Board mandate to identify and establish growth through new business opportunities. If it’s on the board’s agenda, or at least the CEO’s must-action list, then the imperative exists, and something will be done.
2. Budget allocation If there is no budget allocation, then there is little capacity for opportunities to ever come to life. And by budget allocation, I mean an allowance for time, dollars and resources.
3. Accountability established and monitored. If no one is accountable for the outcomes, then it will never happen. But that accountability must flow up the hierarchical tree and not just rest with you, otherwise you will find it very difficult to get senior management involved.
4. A process created. Think of the old sales funnel and how every salesperson knew how many enquiries had to get in the top of the funnel to reach their sales target. And those enquiries flowed through a very clear and proven process. Birthing opportunities requires a funnel and proven process within your business. It will allow you to focus on the actions you need to follow to locate opportunities and to bring them to life.
5. A framework for thinking about opportunities, which will allow you to articulate how opportunities are being surfaced and prioritised, that is, to build a strategic logic.

A final point is that there should also exist a willingness to break a new opportunity out into an independent business to allow it to build a purpose, vision, culture and everything else that will allow it to flourish in its own right. Without the freedom to do that, often the new opportunity is stifled and dies.

 

The Strategic Logic In Birthing New Opportunities

I believe there is a strategic logic about the way an established business should grow through new opportunities, which flows as follows:

1. A core competency – Is there simply something that your business does far better than anyone else, which opens up enormous opportunities to sell the ‘product of that competency’ to many varied applications and customers?
2. To disaggregate and reintegrate – When you take the services/products that you offer and break them down into their component parts, can those parts be rebuilt into an offering of greater value?
3. Growing from your core – Are there needs (present or new) of your existing customers that you don’t offer but you can at competitive value?
4. Connecting existing capabilities to new customers – Can your existing or reintegrated competencies be offered to a new customer group?

This logic is founded in growing from the core of the business in an ever-expanding circle and, therefore, always building and compounding on what already exists, where possible.

 

Identifying Your Core Competencies

You may not be familiar with the concept of core competencies as it was originally expressed but it can be a great starting point for identifying and prioritising opportunities.

Referencing that original work, the real source of competitive advantage for a company lies in its management’s ability to consolidate company-wide technologies and skills into competencies that permit and empower individual business units to recognise and adapt quickly to new opportunities as they are detected. This art of building core competencies rests with viewing the various businesses in a group as a portfolio of competencies.

I have always thought of core competencies in the image of a large tree, where the core competencies form the deep roots of the business’s capabilities, the solid trunk reflects its dominance in that domain, and the branches and offshoots represent all the commercial opportunities that they are able to pursue because of those deep core competencies.

By identifying a core competency, a business is able to invest in and focus on becoming a market leader in that capability. But it must be a competency that the business can and is willing to build leadership in, and which will yield many market opportunities.

From an opportunity perspective, can you identify a core competency? And does it allow you to see what opportunities may exist for where it can be applied?

 

Disaggregation

Disaggregation is the process of breaking existing offerings into their component parts.

You have an existing offering which represents a bundle of services or a product and you only ever view it as a whole. A whole is applied in its present form and masks the many opportunities that its parts could represent.

But it’s possible, by breaking it down into its component parts, that you can rebuild (reintegrate) those individual parts into something that will allow you to deliver a new or greater value service or product to new or existing customers.

One of my earlier articles, ‘Allowing Your Imagination To Find Opportunities For Growth’, unpacks this approach of disaggregation and reintegration in more detail, if you wish to delve deeper.

 

Your Core Customer Group

I believe it is always easier to grow from an existing customer group, where a relationship of trust and awareness already exists. It does often require a repositioning of brand and reputation – but at least it’s not a cold call.

However, again, the problem of familiarity can often block the opportunity to view what else is possible. This familiarity says, ‘This is the customer, this is what they need, and what we offer them, and that is it.’

This familiarity must be broken down, so you can ask, what else may this customer need in achieving the outcomes they seek? And can we provide a value offering somewhere in this need matrix?

Building out your customer persona can be a great way to create a complete picture of your customers’ needs. You can then look to what is changing in the marketplace and your competencies to see where you may be able to step in with a winning value offering.

If you would like a simple process for building out your customer persona, then see my piece, ‘Recreating Your Business In Our Changing World.’

 

Opportunities abound in our ever-changing world, but they will pass you by if you cannot find the time to lift your head up and look for them in a systematic way. And, with anything in our world – including the most successful businesses – if you do not evolve you will not live long.

It requires an ability to recognise core competencies, disaggregate and reintegrate existing services and products, and recognise new needs through a build-out of customer personas. 

 

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All the best in the success of your business,

Richard Shrapnel