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.
Founder of the Thought Leaders Circle