This article is Step # 2 in using Demand Innovation techniques to find sustainable growth opportunities for your business. The focus today is on identifying the Hidden Assets or hidden opportunities for profitable growth that exist now within your business.
What Are Hidden Assets?
Hidden Assets could be one or more of the following, according to Chris Zook in his book Unstoppable:
Undervalued Business Platforms:
- Support Organizations
- New Core Businesses
Unexploited Customer Assets:
- Unrecognized Segments
- Privileged Access or Trust
- Underused Information
- Technical Know-how
- Unique Equipment
- Other Divisions, Sister Companies, Alliances or Partnerships
It’s important to understand where these Hidden Assets live in any company that is truly committed to find ways to grow profitably and sustainably. Why? Because they are almost always underutilized, not generating much revenue, are not valued by some in your company, and generally are at risk to be be eliminated in these days of cost-cutting. Act now to utilize these Hidden Assets before you can’t.
Let’s briefly look at each group of Hidden Assets to understand them better.
Undervalued Business Platforms
Take a look at the initiatives your company has taken to find ways to grow in the past. These are likely to consist of one combination or another of new or improved products for existing or new markets. There may also be specific sales and marketing strategies aimed to penetrate new markets in one way or another. Evaluate these strategies again and look for any products or “adjacent” market segments that now look like opportunities because something has changed to make them more attractive. Is there a product concept that is dormant but can be resurrected rather quickly that would give your company a new competitive advantage in the markets your currently serve? Is there an adjacent market segment that now looks attractive? Any of these potentially represent a New Core for your business if they succeed.
Unexploited Customer Assets
In this context we are talking about untapped insights into customers that represent ways to redefine a company’s core business by strengthening it or finding ways to transition to a new core business. Typically, companies collect all sorts of information on their customers but rarely do they feel that they really understand their Most Valuable Customers (MVCs) as well as they could.
Again, take a hard look at the information your company collects on its key customers. You may find some of the following opportunities as a result of the analysis:
- Neglected customer segments that have terrific growth potential, possibly because something has changed or the segment has begun to grow
- Stronger influence over your MVCs because of the trust and reputation your company holds with these customers that could be more fully developed
- Proprietary information your company has collected that could be used to change, strengthen or deepen your customer relationships, particularly with MVCs
Capabilities are inherently different that than the other Hidden Assets we have discussed so far because virtually any capability is available to any company that chooses to acquire it. The key is to understand how Underutilized Capabilities can be combined with other more mainstream business processes and capabilities to create so called “Activity Systems”. These are combinations of capabilities and business processes that create a new competitive advantage for a company and add new value to customers.
Take a hard look at your existing capabilities, both your key business processes and capabilities as well as anything that appears to be underutilized. Think about what you know about the changing wants and needs of your MVC’s and then think through how your company could combine your existing capabilities and processes in new ways that would create a distinctive and unique competitive advantage for your company. Also be aware that some new capabilities may need to be acquired or learned in some way that represent gaps now in your plan to grow.
The ultimate goal of this approach of Exploiting Hidden Assets is to develop a clearly unique sets of products, knowledge, capabilities and Activity Systems that spin-off new growth opportunities repeatedly. Just consider Apple and the way it has used the IPod to create sustainable new growth opportunities.
Charlie Alter owns Bentbrook Advisors LLC based in Sylvania, Ohio. He specializes in Growth Strategy, Innovation and Coaching and can be reached at firstname.lastname@example.org visit http://bentbrookadvisors.com/ for more information on his business advisory practice.