The school of thought that assumes all high growth businesses are technology based is wrong. Fast-moving companies display an edge that connects with their customer’s world, one filled with imagination, inspiration and fresh thinking. Their founders and teams have an inherent ability to spot a niche, an unfulfilled need or problem demanding a solution.
Gazelle performance can be achieved by repackaging a traditional idea. The fusion of a diverse range of business models to produce a whole new experience is a skill high growth entrepreneurs have perfected.
Focusing on activities that don’t necessarily bring in revenue can also attain the edge. However, they do position the organisation head and shoulders above the rest. In other words they produce a wow factor. Leading experts in creativity would claim that 95% of a company’s point of difference is achieved by as little as 5% of what it does.
High growth businesses excite their customers by displaying their edge with passion and clarity. Companies must avoid falling into becoming a “me too” market player – this drives down margins, the cheapest wins, a sort of spiral descent very difficult to recover from.
So how do you find the edge? It starts with the mindset of the leader – old world tells us to think outside the box. My recommendation is to get rid of the box because it does not exist – eliminate limiting beliefs, self-imposed boundaries and negative influences that restrict your ability to think. Find a coach or a mentor who will help you fill the pipeline with new possibilities. Find your 5%!
A key challenge I keep coming across at the moment is many SMEs fail to articulate or unlock their uniqueness. Many entrepreneurs find themselves bogged down by the need to keep cutting prices to remain competitive. This strategy in my view is a road to ruin. I always try to reinforce the point that – selling your product or service is far easier when you have a point of difference. Many entrepreneurs tell me that they are in commodity markets and that’s just the way it is.
I then go on to use the bizarre example of a notebook to demonstrate differentiation – after all a notebook is a commodity – a 14cm x 10cm notebook in Tesco will cost you around £1. However look at the same size Moleskine in Waterstones – it will cost you £10. If everyone bought notebooks on price they would all go to Tesco. Positioning through innovation is a key route to gaining competitive edge. When you open any Moleskine book there is a small fold away piece of paper titled “The history of a legendary notebook” – it goes on to reference famous people that have used these notebooks. There is a brilliant line that goes… “used for the past two centuries by great artists and thinkers, including Vincent Van Gogh, Pablo Picasso, Ernest Hemingway and Bruce Chatwin. The trusty, pocket sized travel companion held their sketches, notes, stories and ideas before they became famous images or beloved books”. Then go and have a look at their website www.moleskine.com – they have made the business of a notebook a art form. They use storytelling to bring the notebook alive and engage the customer in a truly unique experience.
The lesson is – we can all find a point of difference if we embraced innovation into our business model. The invisible force of creativity, however must be embedded within yours and your teams mindset.
Bravery and courage are important traits of successful entrepreneurs. All too often there is a very fine dividing line between success and failure, the implications on either outcome can equally profound. Rene Carayol, a leading management thinker and person I truly admire talks about the need to sometimes practice “scary strategies”. These are methodologies that need to be employed in order to achieve a breakthrough or pursue big personal/business intention. They often involve raising the bar and extension of our natural comfort zones. Scary strategies are particularly appropriate in difficult selling situations where there is a real need to demonstrate competitive advantage e.g. dislodging an incumbent supplier from a long-standing relationship or as a small business pitching against a global brand.
In considering the deployment of a scary strategy we must pay due recognition to:
– Challenging the status quo and encouraging the customer to change their outlook, in other words try to change their mindset
– Bringing a different approach or one that is unconventional but truly brings benefit (however, there is a fine dividing line between genius and madness)
-Challenge existing practices that are old-fashioned and out of date
Scary strategies should be considered when all traditional methods of winning business have failed. Doing something memorable that is innovative, inspiring and displays a real sense imagination can sometimes win the day.
An approach taken by major London ad agency in the 90’s is one of the best examples I have come across. In the days of British Rail, the top management turned up at the agency ready to be pitched to. An uninterested receptionist, filing her nails, made them wait in the foyer, which was decorated with coffee-stained tables and overflowing ashtrays. The minutes ticked by and nobody came to meet them. Furious at their treatment, the BR managers were about to storm out when an agency Director and his team appeared. “That’s how the public sees BR,” the Director told them. “Now let’s see what we can do to put it right.”
Ambitious high growth entrepreneurs should spend at least 3 days of their official working week living in the customer’s world. Viewing the market place from the desk is extremely dangerous, being immersed within your industry and the needs of your customers provides real-time market intelligence. This helps to tailor propositions specifically to the wants and needs of your market place; it also supports new product and service development. Gazelles companies create a massive gap between them and their competitors because they deploy innovation and imagination to problems, this inspires and very often leads to development and evolution of propositions that the customer didn’t even know they wanted! They occupy uncontested space. Others will soon start to copy and replicate – your job is to stay one step ahead of the game.
High growth businesses we have studied stay close to their key stakeholders. More specifically, they spend time
- Looking at the factors that impact their customer’s performance – this provides opportunities to provide new solutions
- Understanding their customers strategy – this facilitates a partnership working model
- Looking at how they can help improve efficiencies, reduce costs and enhance performance.
Getting close to the market helps to drive what I term “customer lock in” – that phase of the supplier/customer relationship were there is a true partnership, mutual respect and a genuine win-win. Moving to lock in can absorb an enormous amount of time effort and energy, however the rewards can be big. It also makes it very difficult for competitors to move in and occupy your space. Being embedded means any new entrant would have to untangle lots of relationships, systems and processes to get a foothold. A word of caution – never take relationships for granted and be aware of performance vs. KPIs. Customer complacency represents a real danger zone for businesses. Lock in delivers true competitive advantage.
The last six years has been such an enlightening learning experience – its great to have worked with some 3,000 ambitious entrepreneurs many of which would be classified as high growth. My definition of high growth is – start-up businesses that reach £1M in three years or those with a minimum turnover of £0.5M but who can sustain 20% year on year growth over 3 years. Having researched them, worked with them and been one myself – there are some common traits that make them what they are. Here are three inter related strands of their operation that are often so visible:
Leadership, strategy and processes (LSP) – clarity and focus are very important building blocks in determining a successful future. The ability to clearly define the end game then implement a plan to move swiftly towards the destination is fundamental. Strategies are driven with passion and determination and leadership ensures that people are up for the task, things get done! The primary processes of sales, customer service, order fulfilment, finance, people development, quality are measured – the dials on the performance dashboard make for a more efficient running of the business. The company rulebook is in place and there is no misunderstanding around what needs to be achieved. A culture of innovation breeds conditions for growth
Customers, markets and propositions (CMP) – the customer’s world lies at the heart of the high growth businesses mindset. Creating and delivering propositions that captures the voice of the customer is a primary characteristic of a high performing company. They have a distinct ability to identify market blind spots and deliver propositions that often the customer did not realise they needed. This market immersion mentality and approach ensures that the high growth company is looking over the horizon of how to deliver differentiated products and services which bring massive value. High growth businesses more often than not create new customer experiences that are memorable, inspirational, imaginative and innovation. The resultant effect is delight and the creation of an extended sales force led by the customers themselves. Satisfied customers become ambassadors and provide evidence and act as testament to others seeking your products or services – word of mouth and referrals kick in. This really weird thing happens and customers seek out high performance companies because they are great to do deal with – their brand becomes a magnet within the marketplace.
Sales team effectiveness (STE) – sales individuals and teams can only deliver a truly outstanding performance when the above two pillars are in place – it certainly helps anyway. The selling job is far easier when businesses have truly differentiated propositions with a sound enterprise strategy in place. High growth companies ensure sales individuals and teams are highly tuned, tooled up for the job, are great problems solvers, know their products and services intimately and execute the sales process with absolute precision. I refer to this as Customer Connectivity – this effectively defines the sales activity as find, reach, win and keep. So often I am asked to deliver sales training to businesses where they feel that underperformance is down to individuals not doing it right. The reality is poor sales growth can often be the result of more fundamental issues – lack of differentiation or poor back office can be the real cause, the resulting symptoms are that frontline sales staff just fail to secure the orders. Sales training is merely a sticking plaster.
For me high performance sales strategies come from having the above three pillars in place, another way of looking at it is
High Growth = LSP x CMP x STE
Being out of sync in anyone area can result in failure to achieve full growth potential.
Every person has their own set of unique talents and gifts. However, many people have great difficulty in articulating or displaying what they are – it is these nuggets that help to build a point of difference. Communicating what is special about us or what we offer is particularly pertinent in competitive situations. Standing out from the crowd is often a critical driver for success. All too often our authenticity is masked by our inability to clearly define our personal and professional proposition. In the business world entrepreneurs refer to their unique selling point, this concept is transferable to many situations we find ourselves in life – for example, being interviewed for a new job, auditioning for a role in a play or applying for a university course. Our ability to win can be reliant on us differentiating ourselves from the competition. When you find yourself in one of these situations just remind yourself that others probably want exactly what you do! So what will you do to gain the edge?
You must condition your mindset to understanding what makes you unique – it is a question that at some point in your life you will be asked – your success may depend on your answer! You need to deliver a response that is powerful, engaging and passionate. When you have a clear appreciation of your authenticity it gives you confidence to pursue your goals and accomplish your mission in life. Work out your Unique Proposition Statement by exploring:
- What is it that makes you unique?
- What are your unique talents?
- What makes you special?
- Why should others listen to you?
- What attributes do others value?
- The successes you have already
- The impact you have had on others
Summarise in 300 words your reflections on the above. By going through this extremely powerful process you will gain greater insight to your personal competitive advantage. Once defined and clear in your mind what exactly makes you different – just observe how much more success you attract!