Follow the money, grow outside of comfort zone

March 29, 2018
Industry News
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Kantar TNS
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Growth has shifted. Companies have to make this pivot. The task at hand is to relearn growth, especially the elements of scale, value and influence.

Growth is simple because the complete answer to the question of growth is to follow the money, or to paraphrase management guru Peter Drucker, keep connected with demand. It isn’t easy because going forward, following the money means doing business outside of their comfort zones.

It is true that growth has slowed for many companies, but despite the concern evidenced by organizations appointing Chief Growth Officers, growth hasn't gone away. Rather, Growth has shifted.

Growth is occurring but it is no longer found in the traditional pockets of demand. To grow, companies must shift with demand, or follow the money to create their own waves of growth—not hold off in the hope that external circumstances will bail them out—even as doing so takes them to outside of their comfort zones.

Outside of your comfort zone means shopping and/or demand spaces, occasions, outlets, channels, moments and/or missions in which companies must operate with business models of scale, value and/or influence that are unconventional or different—often radically so—for the category or a company, and that require the acquisition and deployment of novel, often unfamiliar, assets, talent, organizational structures, decision rules, production processes, payment systems, retail channels and/or marketing vehicles.

In short, these are places that require whole new ways of working.

Big established companies must remake themselves from top to bottom, transforming the work they are doing, not just tweaking it. Traditional silos, structures, mindsets and ways of working no longer suffice. Smaller companies face these realities, too, but with an additional challenge when big competitors finally start to move.

What has driven us out of our comfort zones?

Change is taking a toll. Big established companies are under increasing pressure because they are heavily invested where demand used to be. This makes it difficult and uncomfortable for them to follow the money to the new sources of demand.

Shifts in demand are not new. Companies have dealt with them successfully before. But this time around, shifts in demand are part of an historic pivot in the marketplace. Today’s shifts are more fundamental and are occurring much faster. Failure is less forgiving and harder to recover from.

When the marketplace changes, successful, established companies often find that growth has moved away from them. These companies have mastered a particular confluence of macro forces, consumer lifestyles and competitive situations. They have entrenched themselves in this environment in order to monetize it at scale.

But over time, macro forces shift, which is then followed by changes in lifestyles and market demand as consumers adapt to new conditions. New kinds of competitors move into this evolving, shifting marketplace. When this transition takes hold, growth is found outside the boundaries of the previous environment in which established companies have embedded their outlook and operations.

Relearn growth

Uncomfortable places can seem daunting. So change needs to be put into proper perspective. That begins with a whole picture of the market landscape, which reveals not a loss of potential but a pivot of potential. Growth has shifted. Companies have to make this pivot. The task at hand is to relearn growth, especially the elements of scale, value and influence.

* SCALE: Companies will have to master reverse segmentation—in other words, putting lots of small things together rather than breaking one big thing apart.

* VALUE: Companies will have to put first priority on the experience—in other words, reframe brand and category management as experience management.

* INFLUENCE: Companies will have to get outside of the data to influence predictive systems—in other words, the paradox of digital is that it makes analog more important.

To be ready to grow where demand has shifted, there are three questions that every company must be able to answer with a yes. These are the fundamental requirements for finding growth outside of their comfort zones.

Question 1: Is my company designed for agility?

Question 2: Is my business deeply grounded in a sophisticated data spine?

Question 3: Is my organization resolutely breaking down silos?

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