Sustained business growth is more difficult than ever. Traditional business growth formulas are lacking, barriers to entry are disappearing, new players are breaking the rules, channels are proliferating and evolving, disruptors are being disrupted, markets are reaching maturity, trust and focus are fleeting, and the war for talent and the consumer is raging. Despite these growth challenges, many businesses still cling to old paradigms and behaviours.
Challenges aside, there is growth to be found; it lies in uncomfortable places. It requires business leaders to embrace fresh paradigms and forget the old tired rhetoric.
To decode the often illusive world of business growth, WPP and the Consulting Division of Kantar under the Leadership of Frank van den Driest and Marc de Swaan Arons, launched the Initiative for Real Growth (IRG) – the most comprehensive global study on the topic.
The study reveals seven paradigm shifts that set growth overperformers apart from underperformers:
Moving from: Obsessively chasing market share growth.
To: Understanding how the market will evolve and gearing up for it.
Underperformers often chase market share growth as a signal of success. The reality is that many markets are ripe for disruption and reinvention. Overperformers adopt an expanded long-term view on how the market will evolve. They make understanding the future a priority and consistently invest in gearing themselves up to win in the future.
East Africa telecommunications pioneer Safaricom embodies this abundant market view. They looked beyond their dominant share in telecommunications and understood the convergence of telecommunications and financial services. They did so by disrupting financial services with M-Pesa Mobile Money, delivering smoother transactions and then launching into savings and loans. Masoko, their latest eCommerce venture, is also a testament to this.
Moving from: Being fixed in one business model and rigid ROI metrics.
To: Evaluating new business models with alternative ROI horizons.
Underperformers often put their faith in the “spreadsheet mafia”, a number-crunching force who quickly shut down ideas that don’t conform to existing business models and ROI formulas. Overperformers are less fixed to tight spreadsheets and empower employees to explore other business models and unpack the assumptions that underpin ROI, leading to diverse thinking on new ways to make money.
Coca-Cola, an FMCG veteran, announced the acquisition of Costa Coffee, the second largest coffee chain globally. A natural extension of their beverage business, but a completely different model. Coca-Cola CEO James Quincey sees this as an opportunity for joint value creation through Costa’s capabilities in retail and Coca-Cola’s global reach and marketing prowess.
Moving From: Chasing customer satisfaction scores.
To: Continually evolving the customer experience and reducing points of customer friction.
Underperformers believe that if customers are satisfied, the business will do well. However, the reality is that the customer’s appetite for better, easier and faster will never be fully satiated. Overperforms have a different way of seeing things, they focus on finding new ways to eliminate friction in the full customer experience, to truly delight them.
Amazon founder and CEO Jeff Bezos, in his annual letter to shareholders, famously said, “Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.” Amazon is always on the frontier of evolving customer experience, whether it’s Alexia or Dash.
Moving from: Accepting the cultural script as a fixed part of the corporate DNA.
To: Embracing an evolving culture to win.
Corporate culture is a mix of beliefs and behaviours that determine how company employees interact and engage. Underperformers see culture as a behemoth, difficult to influence or change and often accept ‘’the way things have always been done. Overperformers are unafraid of changing the cultural script and share cultural traits of connectedness, entrepreneurship and innovation. They value diversity at all levels and invest in training their people.
Under the leadership of Satya Nadella, Microsoft is embracing a cultural shift; from technology focused to customer centricity, showing that even corporate giants can move the needle on culture.
Moving from: Fixating on internal battles and friction.
To: Winning externally with agile empowered teams.
Underperformers are disproportionally bogged down in internal bureaucracy and battles, and are caught up in; internal policies, procedures and politics diverting attention from the rapidly changing outside world. Overperformers organise themselves into small agile teams that move swiftly when needed. They are more effective busting internal barriers and are more geared up to win externally.
To stimulate more agile innovation that is unperturbed by corporate red tape, Google has set up an internal incubator called Area 120. An experimental program where small teams build, launch, and iterate on dozens of novel ideas that might otherwise not be explored. Google accepts that many of these experiments will fail but embraces the opportunity for teams to test the limits and learn something new.
Moving from: Chasing bigger and better data in an analysis paralysis frenzy.
To: Unlocking the power data with human insight and creativity.
Underperformers think that more data to explain the problem is the solution, but the reality in the information era is that data alone is a table stake. Overperformers unlock the power of data, by pairing it with human insight and creativity, integrating a right-brained and left-brained view. They do this by attracting whole-brained talent or constructing teams who are a mix of right-brained and left-brained individuals.
South African insurance maverick Discovery’s pioneering behavioural insurance program Vitality is a great example. It gathers data on the consumer’s health-related behaviour and transforms this into a tiered reward program with a myriad of lifestyle benefits. This whole brain view has propelled outstanding business outcomes.
Moving from: Chasing profit as the end all and be all.
To: Chasing purpose and human impact.
We’re all concerned with the pursuit of top-line growth in business. However, underperformers are disproportionately focused on the bottom line. Overperformers look at commercial metrics but also consider the human impact of their business. They carve out a meaningful role for themselves in the lives of consumers, employees and society.
Old Mutual has a clear human-centred purpose – “creating positive futures for clients, their families, communities and broader society. This human view has helped them become the largest player on the continent and the recipient of awards as a superior investor, brand builder, employer, and corporate citizen.
To embrace these paradigm shifts requires a fresh new leadership approach, the courage to act, and the passion to make an impact on employees, customers and society.
Is your business ready to embrace a few vital shifts?