Are you looking at growth strategies from a customer’s viewpoint? This past week I have referred to the concept of Service Dominant Logic several times and how your value proposition can be viewed from the point of use. This type of thinking opens up a new context for innovation and growth. It moves you past transactional thinking and into the customer’s world. However, for long term growth it is not enough.
One of my favorite authors, Michael Schrage, author of Serious Play, recently published a new book taking these concepts one step further. Who Do You Want Your Customers to Become? challenges us to take our value proposition of use to a longer term growth platform. He dares us not only to have a corporate vision statement but a customer vision statement saying that our future depends on their future. He phrases all this in something he calls “The Ask” and defines it this way:
Conventional management wisdom has evolved from thinking about innovation as designing for customers, to innovation as designing with customers. The Ask takes the next essential leap: thinking about innovation as designing customers. Innovation should be treated as a medium and method for (re)designing customers.
Making customers the (re)design focus fundamentally changes how innovators invest in change. At one global foods giant, The Ask prompted spirited debate about creating a “store within a store” instead of redesigning product packaging and point-of-purchase displays. These executives grasped that the future of a brand or a marketing promotion or a product enhancement demanded different conversations than defining their customers’ futures. Designing tomorrow’s best customer is not the same as designing tomorrow’s best product.
We find our greatest growth opportunities on the edges of the use of our product/services. We must make a concentrated effort to identify and participate in relevant knowledge flows on the edge (EDCA). In the book The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion, the authors discuss the relationship between the core and the edge. In the excerpt below, think about the core being the standard work (SDCA) of your growth strategy. PDCA provides the bridge between the core (SDCA) and the edge (EDCA).
Knowledge flows naturally flourishes on the edge. Why? Because by definition, participants on these edges are wrestling with how to match unmet needs with unexploited capabilities and all the uncertainty that implies. Edge participants therefore focus on ways to innovate and create value by connecting unmet needs with unexploited capabilities and then scaling these opportunities as rapidly as possible. In the process, they create significant new knowledge.
Since much of the most relevant knowledge on the edge is tacit knowledge, edge participants naturally place a heavy emphasis on building diverse networks of relationships that will help them to collaborate more effectively with others in the creation of new knowledge. For this reason, gatherings where participants can share stories and experiences, learn from each other, and identify potential collaborators become particularly prominent on the edges.
Edge participants often reach out to participants in the core in an effort to build relationships and enhance knowledge flows. But those efforts are often frustrated or at best to marginalize because where participants are too busy concentrating on defensive strategies within the core, trying to protect their profits and position, to understand the true growth opportunities represented by relevant edges. Or participants tend to focus on transactions rather than investing in a long-term effort to build sustainable, trust-based relationships on the edge.
For this reason, especially, the few core participants to understand the full potential of the edge and are able to reach out and connect into rich knowledgeable flows occurring on the edge will be in the best position to create economic value. They will be able to respond to increasing margin pressure in the core by helping to scale innovation on the edge and in participating rich new sources of profitable growth arising there. Unfortunately most core participants to the extent that they recognize increasing importance of knowledge flows at all, tend to focus and knowledge flows within the core rather than making a concentrated effort to identify and participate in relevant knowledge flows on the edge.
Why do these edge people or these risk takers even care about the core people? Edges and cores need each other. Unless they become part of the core, edge players never gain access to the stature, money or connections that exist in the core. The core needs innovation from the edge to continue refreshing and regenerating itself. In business terms, edge companies need resources to scale growth and core companies need new growth platforms to compensate for increasing competitive pressures.
When we envision tomorrow’s best product or service being used in our customer’s future it creates far-reaching possibilities. Our most successful sales people are already thinking in these terms. Recently, I wrote a blog post, Lean Salespeople are Challengers, not Problem Solvers, about how The Challenger type salespeople are willing to challenge a customer’s thinking to create new opportunities through more effectiveness or innovative ways. It is this type of thinking of your customer’s business, the edges of their business that we must strive to achieve through the methods of SDCA, PDCA and EDCA.
This week, April 22nd thru the 26th, we will concentrate on how to grow, or scale-up your small business. I will be scaling-up the entire week culminating in a webinar, The Lean Scale Up, which is followed by a period of Q & A on the afternoon of April 26th. Only registered participants will be invited to webinar and Q & A.