Is there a Fifth way to Grow a Business

We normally define four basic ways for a business to grow:

Market development: Taking current products into new markets.
Market penetration: Taking our current product lines and penetrating our current markets more deeply than we have in the past.
Innovation or Product Development: Introduce new products into our current markets.
Diversification Strategy with Innovation/Product Development: Introduce new products into new markets. This often is accomplished through acquisition and mergers with other companies.

I often like to look at these strategies and determine what I would call the speed of value. As Roger Martin says in the book, Playing to Win: How Strategy Really Works, you have to be able to win the two moments of truth. One is at the point of purchase and the other at the point of use. From a marketing stand point, I might argue that there is another moment of truth, the awareness stage. If they are never aware of us, we never get the opportunity to play for anything.

Typically, in a product development process, people should be asking questions such as:

Is value apparent?
Is value substantial?
What do you see as the value?

We are encouraged to do this so that the product/service can be engineered and designed into the product in such a way that when the product comes out, people can immediately determine and understand the value that’s in it. That whole adoption process and customer due to the speed of value are imperative in choosing where to compete. Growth can come about through improved and innovative ways of supporting the product, innovative ways of warranting the product, innovative ways of selling the product, and so on and so forth, all of which are value adding within the existing value delivery system.

That brings us to the other key question that strategic planning should be focusing on. Where does the organization choose to compete? Because they have a bunch of different opportunities and different market segments, they can focus on any specific product/service market, but which one?

The above are all proper questions, and some excellent books on strategic planning have been written around. We can even bring into the discussion Red and Blue Oceans. However, my thoughts go back to the original question of this post, Is there a Fifth way to Grow a Business? One could argue that another growth strategy would be services, but for the sake of simplicity, we will consider services a product at this time. I believe this is where, Service Dominant Logic (SD-logic) may play a vital role. The basic concept is that customers are always co-creators of value. It’s the way that the customer sees value, whether it’s in the physical good, or if it’s in a service or a combination of both of those and if they don’t see a benefit to them they’re not going to engage with you.

When I think of being co-creators with my customers, will I continue to look at the four components of growth the same way? Will all three moments of truth be already won? Will Playing to Win mean just becoming a role player on a bigger team? Will value already be apparent? Hmm! Is the fifth way to grow a business embedded in Service Dominant Logic thinking?

P.S. My take on Playing to Win: How Strategy Really Works is that it is very much a Hoshin Kanri approach. The structure of the process are amazingly similar. The book itself is an excellent read. Often times you hear me refer to Franklin Covey’s, The 4 Disciplines of Execution as Lean Simplified. I believe Playing to Win could be called Hoshin Kanri simplified.

Lean more at this upcoming event: Grow your Small Business with Lean