Last fall, I published an article in IndustryWeek on the challenges of planning for growth in 2013. I focused on three themes that appeared to be particularly relevant given the challenging economic environment that most experts and firms were projecting for 2013.
With more than half of the year now behind us, it’s of interest to review those themes, as it is always hard to remember basic blocking and tackling fundamentals when the business environment is as challenging as it has been in 2013.
The first recommendation suggested that selling into growth should always be a cornerstone to growth plans, spotlighting the fact that emerging economies were in fact where the growth was likely to occur.
Growth has been a bit harder to find in 2013 than many had hoped for, with the developed economies remaining quite sluggish and even the previously fast growth markets of China, India and the Middle East slowing somewhat.
But the locus of growth does remain the emerging markets. The Conference Board’s five-year forecast has emerging market growth rates about 2-1/2 times higher than those of the developed markets.
Achieving success in the emerging markets requires that firms be fast and nimble. One executive recently told me, "I’ve been going to China for over ten years. My last two trips were spent in cities – big cities – that I had never heard of before."
The companies that have been active and successful in the emerging markets know that each successive increment to growth involves a new segment of the emerging country middle market that has reached the income level at which they can participate and become interesting prospects.
If emerging markets are not part of your growth plans, it may be time for reconsideration.
The second recommendation emphasized the importance of strategic relationships with customers and of working to identify pockets of growth within your own major customer relationships, the ones that are already in place.
Particularly for industrial firms, this is good advice in general and especially true in the sluggish economies of 2013.
The Strategic Accounts Management Association reports that strategic accounts provide two times faster growth compared to other customers, according to a recent 300 company survey, and a 2012 Institute for the Study of Business Markets study cited “Building Stronger Connections” as one of eight key trends facing business-to-business firms.
The ISBM report stated: “Firms are realizing that to compete in the next decade, they won’t be able to ‘go it alone.’
Focus on Fit
New skills in managing connections to partners, stronger new business models and connections to channels, and the need to understand the ins and outs of ”co-opetition” will be important as we move to the next decade.”
My final recommendation emphasized focusing on fit, looking for situations where your firm best responds to the factors that drive customer purchase decisions. Determining where your firm’s expertise responds to underlying business drivers has been a challenge in 2013.
I have seen unexpected success stories in Detroit’s automotive market by suppliers that were able to address carmaker concerns about security of supply. I have seen other instances in which a firm that was unsuccessfully chasing falling competitor prices learned that its secret to success involved services viewed as critical by its customers.
In both of these instances, the firms that successfully responded to these customer priorities made comments to the effect that what allowed them to succeed was a sea change from what they had experienced in the past.
Hearing from their customers what was important (and particularly what was newly important) was the key tool that allowed them to take advantage of competencies that had become an important fit to their customers.
If your firm doesn’t have an active and high-frequency program oriented to hearing messages from the market, investing in that tool can be a route to enable you to identify those customers and segments in which fit is real and makes a difference.
Vince Lombardi once said that “some people try to find things in this game that don't exist, but football is only two things – blocking and tackling.”
The same is largely true for business, except in those rare instances when a firm invents fire and enjoys its warmth -- at least until others catch up with them. Selling into growth, prioritizing strategic relationships and focusing on fit are the blocking and tackling of business success, even more so when times are as challenging as they have been in 2013.
George F. Brown, Jr. is the cofounder of Blue Canyon Partners Inc., a consulting firm working with leading companies on growth strategy. He is the coauthor of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs, published by Greenleaf Book Group Press of Austin, TX. He has published frequently on topics relating to strategy in business markets, including articles in IndustryWeek, Industrial Distribution, Chief Executive, Business Excellence, Employment Relations Today, iP Frontline, Industrial Engineer, Industry Today and many others.