Book Review — How To Grow When Market Don’t By Adrian J. Slywotzky, Karl Weber with Richard Wise

This is a good read for these time specifically. This book explain how to grow our business at difficult times. It is explained through detailed example of different industries, what measures they took and what was the results. It explain the scenario of both business to business and business to consumer.

Summary

The traditional model is : Make a product — Launch — Sell it — Go International — Acquire & consolidate — Cut cost — Raise price and Repeat !! But there is crack in this trade model. There was a new troubling pattern — entire value flow from an industry. Product centered design will not trigger the growth desired.

World is saturated with products and no one is waiting for your product. Product enhancement is not an option because people wait to replace the existing with new technology and new product everyday. They shift to new technology everyday.

International market is not an option too because it is also depleted. Merging and acquisition has also its boon as big business has no future in acquisition.

The key to new growth is Innovative Business design. We have to sooner acknowledge the problem then only we have a chance of beating it. The new approach is solve the issue surround the product not the product itself.This is demand innovation.

Demand innovation is:

-solve bigger problems and improve performance

-create new value and revenue

- new skills : find new business spaces which will last decade

- Study pressure in every stage and see how they create opportunity by keeping customer in mind.

- Use existing information system

- diverse income stream

- use existing resources to fund growth

- use rich web of customer relationship

- multiple growth plan from central value chain position

- realize formula to reach a milestone cannot be applied to reach the next one.

- identifying and serving new customer needs all focused on activity surrounding the product

- address inefficiency, cost cutting, help customer to reduce complication

Three source of new growth:

1. Focus on next generation demand

Create new, more powerful opportunity for core product sale be reinforcing customer relationship. Shifting bases of competition from price and performance to new differentiated and valuable dimensions.

2. Focusing on broader customer needs

Integrated offer in product and service sale.

3. Turning improvement in customer value chain to new revenue stream

Best growth practitioners create growth on all three dimensions simultaneously. New demand often beheads new demands. Serving the first of customer needs uncover a new set.

Demand Innovation

Understanding and acting on your customer urgent problem and priority by asking them. Answer their question and approach the improvement with answers. Great performance in the core business is the pre- requited for demand innovation.

Great customer offering supported by available business design. Solving a customer problem can be less in fact value destroying if the solution is not liked with specific target buyer.

Boost success by identifying and mobilizing powerful hidden assets in your company

Hidden assets

These are mainly ignored. It can create good and great differentiation by identifying them. The main advantages are it will lower the cost of customer acquisition, reduce the cost of development, accelerate the ramp up of the business.

Working on development on existing asset may take up more money. More you use the hidden asset mare you have.

18 Primary hidden assets in 5 categories

1. Traditional intangible assets

- Intellectual property and content like movies, patents of Intel etc.

- Method and core capability like Toyota’s machinery, Mc D’s food formula

2. Customer relationship

- Customer needs

- Customer economic challenges

- Customer authority

- Scale marketing

3. Strategic real estate

- desirable location

- Speed and cost advantage in new market

- Market position

-value chain position

4. Enterprise Network

-Extended view of enterprise

-New product and service to network

- reduce customer acquisition cost

- 3rd party relationship with suppliers, channels and university

5. Information

- System and software to serve customer which is originally used for office use

- technical know how to address new customer needs

- byproduct — balance info to next in chain

- Market window — information flows through us as middlemen

Mental adjustment is a main thing to apply demand innovation. Should come out the traditional strategy of growth view from outside to identify hidden asset. Should have mentality to use these as assets.

Demand innovation require different raw material than traditional growth, different skill, different organization structure, different matrices and compensation structure

Hidden liability

These are the barrier to new growth. It can undermine and devour new growth initiative before it take off the ground.

Basic types of hidden liability:

- Cultural Liability

- Corporate mindset

- Culture and history

- Leadership and commitment

- Structural liability

- Organization structure

-Skills and capability

-Measurements and incentive system

- Budgeting and resource allocation problem

- Information system

- External liability

- Brand authority

- Customer readiness

- Investors resistance

- Distribution channels and alliance

Identifying the hidden liability, mapping , quantify it is the first thing.

Identifying hidden asset and hidden liability, evolve both , work on assets and overcome liability.

Middle Managers

Middle managers are people who are currently not in the leadership position. All the team members can account for this. Everyone sees their role in the organization as a defined box with boundaries. But believe that this boundary can be expanded or extended. You can create bridge between other boxes. These people are those who know fine details about the customers. They can be decision makers in identifying hidden assets, overcoming hidden liabilities and creating growth opportunity.

These middle managers should:

- Look out for smart growth ideas.

- Get the support of other middle managers; you will need the unique skills and expertise of them for new initiatives.

- Model growth oriented thinking in new and profitable direction.

Friction, mistake, failure, fall down is certain — but you can overcome. You can be the CGO — Chief growth Operative.

To have new growth:

1. Operational excellence

- Core business should be excellent

2. Mandating new growth at operating level

- Growth in everyday decision. Everyone should be in for growth. No specific team, everyone from CEO to team should be in.

3. Supporting ideas

- Bad ideas should be killed

- Balance between ideas in a defined space

4. High level support for growth initiatives

- Finance , time, energy and political capital.

5. Structuring new growth function

-Different structure than traditional one.

- Don’t replicate because there is new need

6. Building asset based accusation and alliance

- New growth require new skill set than the core, selective acquisition

- alliance with selected ones

- hiring requires assets

Consumer company can have this growth by innovative solution to customer need. Reaching out to customer and addressing their problem.

Information asset is a key asset for consumer business. Characteristics of the Information asset are:

1. Powerful to address complex customer risks

Such as managing uncertainty, to provide accurate information.

2. Reusable asset

3. Customized and delivered to customer quickly in low cost.

Demand innovation takes time. There are practical and tactical moves which are short term moves which can be applied to current business.

1. Re-averaging and re-segmenting customer base

2. Building strategic customer relationship programs

3. Replicating best customer relationship

4. Value pricing

5. Product offer to system offer

6. Value supporting service around your product

7. Shifting brand equity investment to emphasize the emotional and affinity element of the brand.

New growth are required sooner than we expect. Successful planning of growth begin with:

- Understanding objectives

- Realistic growth target

- Look the status of current growth plan and activities

- Do qualitative analysis on current growth plan

Best action plan — dialogue between senior managers, middle mangers and customers. Use the resources effectively. Be responsible for the result. Do iterations. Examine and re-examine repeatedly and correct it. It is a long process. Answer the following questions:

1. Is our plan aggressive enough to meet the organization growth needs?

2. Is our plan practical?

3. Is our plan realistic?

The success or failure of the growth action plan will depend on the support of your employees, board members, investors. Ask the questions on their shoes related to your growth initiatives. If you don’t have solid answers to all this questions then you don’t have an efficient action plan for growth. Action plan should have a active feedback loop, where we can monitor the progress of each initiatives.

New growth initiative will be an increasingly vital source for values. If we start now we can be one or two step ahead of other companies. You have the opportunity to avoid stagnation in growth, you have the opportunity to re energize your management and your employees and develop a leadership position in creating growth for your industry.