Leveraging Hidden Assets to Grow
Business growth typically comes from one or more of the following basic approaches to to innovation:
- Growing core markets with new or improved products & services
- Capitalizing on adjacent market opportunities
- Discovering new markets & new product or service opportunities
- Disrupting existing markets
Many companies struggle with actually uncovering real customer needs that will drive any of these four approaches to profitable growth. Companies that understand the evolving needs and problems of their best customers, and how to find similar customers, have been proven to grow faster and more sustainably, generate higher profits and become more innovative.
Demand Innovation
Is a term coined by Adrian Slywotzky and detailed in his book How to Grow When Markets Don’t (2003, Warner Books). It refers to a focus on incremental, customer-focused innovations as opposed to attempting to hit home runs with break through product-centered innovations. Slywotzky has written extensively on Demand Innovation, which at its heart focuses on discovering new forms of customer demand for growth.
The problem according to Slywotzky is that many companies are stuck in the “No Growth Zone”. During the past decade, many companies have moved from a past of strong growth for their base businesses into a future of low or no growth. Very few have figured out how to move beyond this point.
Does this sound familiar with your company?
Step #1: Hidden Assets & Anticipating Next Generation Customer Needs
The first step companies need to take is to anticipate the next-generation needs of their best customers. At the same time, they must begin to identify and understand their company’s “hidden assets” or hidden opportunities for growth.
For some companies, a hidden asset might be unique customer access; for other companies, it might be their technical know-how or their unique window on the market. By connecting the next-generation needs of your customers with your hidden assets, you have the foundation for a profitable growth plan. Hidden Assets can be categorized in the following way:
1. Undervalued Business Platforms:
- Products
- Adjacencies
- Support Organizations
- New Core Businesses
- Unrecognized Segments
- Privileged Access or Trust
- Underused Information
- Technical Knowhow
- 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.
This process starts by improving the way companies observe and respond to the needs of their best customers. The deeper the relationship with your best customers, the better you'll be able to identify their unmet needs. Think about what you do differently with your best customers. Chances are you can replicate this with your other customers to expand your base of deep customer relationships.
Step #2: Shift to a Demand Driven Growth
Companies usually need a change in attitude and approach to begin this process. It is critical to stop viewing your business through a product lens and begin to study your customers through an economic lens.
It also helps to stop thinking about company size as a growth inhibitor and to begin to think of size as a multiplier of growth opportunities. Those companies that worry about cannibalizing their base business need to recognize that building new-growth initiatives can reinforce and strengthen their base.
Maybe most importantly, companies have to stop looking for blockbuster products that will revolutionize their market and, instead, think about a trajectory of evolutionary, customer-centric moves based on structured creativity and operating discipline.
Charlie Alter owns Bentbrook Advisors LLC based in Sylvania, Ohio. He specializes in Growth Strategy, Innovation and Coaching and can be reached at calter@me.com visit https://bentbrookadvisors.com/ for more information on his business advisory practice.
