The profit from staying focused on your core in a disrupted marketplace

We live in a world where two thirds of businesses are trading in sectors that are restructuring. Newspapers, telemedicine and  e-commerce are just some of the sectors that are radically redefining the way they take value to the marketplace. Amid all this turbulence, it has never been more important to return to core of the business and focus on the customer promise, and the primary value proposition of the organisation.

Chris Zook, Bain Partner and author of Profit from the Core: a return to Growth in turbulent times, talks about the merits of increasing the focus on the businesses core, to return to profitability. He puts some context around this imperative with the chilling fact that only one in ten companies go on to achieve sustained profitable growth. Further he cautions those  in  pursuit of growth by targeting  the “hot” sectors, citing that 80% of the sustained value in the market comes from lower growth businesses like Toyota. (Thanks Chris!)

So how do we return to the core and focus, it starts with a return back to the customer promise. This means taking a deep dive to truly understand the value transmitted from your organisation to the customer. People who only make this a tangible focus such as, functional benefits and time and money savings, run the grave risk of overlooking what really matters to their customers. (Sony is a classic example of this mistake). The faster, quicker, smarter benefits are great sources of competitive advantage, but the core is what intangible value are we giving to our customers to help to move them closer to their ideal self. The core goes back to an understanding of the role of the brand in the customer’s self image. So while everything else may have to change, the business holds true to its customer promise.

Focus also means the employees understand the core and know their role in the delivery of it. It means designing the business model to hold fast to the core, designing business processes that deliver on the promise, and having an employee brand promise that allows them to walk the talk of the customer promise.

And finally, focus on the core is about removing the time bandits from your business and the distraction of difficult people. In this hyper competitive marketplace, we need to keep the conditions in place to allow the focus to flourish.

Louise Kelly

Managing Director

http://www.heartsandminds.com.au

Founder of the Thought Leaders Circle

http://www.thoughtleaderscircle.com

References

http://www.bain.com/publications/articles/a-return-to-growth-in-turbulent-times-video.aspx

4 thoughts on “The profit from staying focused on your core in a disrupted marketplace

  1. Great article Louise…especially about the time bandits! However I was having problems “liking” or being able to make a comment foer others to see? WordPress kept saying I needed to log in then not allowing me access??? Cheers,Lx Date: Sun, 2 Sep 2012 00:36:55 +0000 To: lindajanemarlin@hotmail.com

  2. Hey there I am so delighted I found your blog page, I really found you by
    accident, while I was looking on Aol for something else,
    Anyways I am here now and would just like to say thank you for a tremendous post and a
    all round thrilling blog (I also love the theme/design), I don’t have time to read
    it all at the moment but I have book-marked it and also added
    in your RSS feeds, so when I have time I will be back to read
    much more, Please do keep up the fantastic jo.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s