Today’s world of business is, at best, choppy. Assessing the state of the global economy is not simple. It’s difficult to predict what will happen next, and formulaic advice to executives rings hollow. But the news and prospects are not all bad. While banks and businesses that are dependant on easy credit are tanking, other businesses, like Intel in the States and Tesco in the U.K., are predicting that 2008 will be a good year—signaling that there is opportunity in every economy for smart companies. In a true global economy, where goods and services can be sourced and sold anywhere, and when technology enables companies to operate in new ways, smart companies can still grow. But executives need to think differently to find opportunities for growth.
Throw the budget away and adopt a “just do it” philosophy.
When revenues for the year are uncertain, managers often apply tighter financial controls. Budgets are scrutinized and more strictly enforced. But the answer of how to grow during a challenging time will not be found in a budget or even in plans that pass for strategy. Budgets and plans may appear to enforce discipline, but they also represent entitlement. During choppy economic times, no one should assume that they can just keep spending.
A company’s resources need to be redirected, but still with financial discipline. And, with a nod to Nike, decisions and actions need to be made quickly.
How can we create more value for our customers?
The companies that I studied in my new book, Outsmart, have found new value to deliver to customers and new ways to deliver that value. Customers rewarded these companies with high growth. For example, Shutterfly—the company that I thought was a photo-finishing business to which customers sent digital photos for processing—described itself as a “social expressions company”. With that broader lens on its business, it was finding all sorts of ways for its customers to share photos with members of their community.
Sonicbids—a company that you may have never heard of unless you are in the music business—has found ways to connect 130,000 musicians and performers with 15,000 promoters. These musicians and their audiences represent a $13 billion growth market that no one had even seen.
During challenging times, incumbent companies, looking for growth strategies, often focus on what their competitors are doing. Forget your competitors for now and refocus on the needs of your customers. That’s where opportunity comes from.
