There's no doubt we're in the thick of more challenging times. Stress levels are increasing and the weight on all of our shoulders is heavier than it was just a few years ago. Yet at the same time we are being called upon to focus with greater intensity on maintaining profitable businesses, perform our work more effectively and add greater value to our customer and employer relationships in the face of an uncertain economic atmosphere.From 1990 to 2000 it has been estimated that only 7% of all publically traded companies (U.S. statistics), enjoyed eight or more years of double-digit growth in revenue and operating profit.
What then do companies need to think about today in order to realize double-digit profit growth? To answer this, we need to start by realizing one key theme. The mind shift needed is to focus beyond product innovation to customer innovation. Inventing new ways to serve your customers, capturing value and offering strategic leveraging opportunities is where it's at. We are in a time of much product saturation and global over capacity which will not provide the kind of growth we are seeking if we don't focus on the customer relationship.
How do we do this? We need to discover new ways of growth by leveraging these relationships. Surrounding your core business with value added services allows you to build on your client relationship. By offering these value-added services that compliment your business, you have successfully built on the platform of that customer relationship. Through the consolidation or bundling of services offered, you have also helped cut client costs.
What's at the heart of this thinking? Efficient supply chain management, of course. That is why any company that values its supply chain as core to creating this demand innovation knows it's the key to gaining market share and profitability. Companies such as Wal-Mart know this and have said for decades they are a supply chain management company first, a retailer second.
Knowing the value of "customer access" is key. This means understanding how to leverage your customer relationships so they become stronger. Information shared then becomes richer and deeper; growth is imminent. A company that wants to develop a new growth strategy must reinforce its core business and then access related customer needs.
Supply chain efficiencies then generate the profits needed to support new growth initiatives. There has to be a solid flow and commitment to the core business along with the new growth initiatives. It's a delicate balancing act. There also has to be a solid business model to bring these additional services to the marketplace. Employees have to present, in a credible fashion, their business case in order to get the 'go' or 'no go' decision from management as well as buy-in from other employees.
The key message to remember here is this: the way to offer leading edge services that are innovative to your clients is to continue focusing on mastering current problems with your most important customers. Getting closer to your customer allows the relationship to become more fulfilling by sharing more information, which allows the ideas exchange to become more creative and solutions based.
Building rapport does something good for you as well. Your customers challenge you to become more effective at what you do for them. Through an open, honest communication process, your customer is bound to be more truthful and offer opportunities for how you can further help them. More ideas then get generated, and the cycle continues.
The last part of the equation is ensuring everyone in the company is conscious of adding value to the bottom line - regardless of their position. This responsibility cannot just come from the top. It must be shared throughout the company. When you make growth everybody's business unexpected gifts can emerge from all levels in the company. You just need to give people permission.
In days where companies embrace the idea of increasing standards on performance and improvement through standards such as Kaizen, ISO and Six Sigma, we are given the template on 'what' to do in order to improve the standards. The 'how' of this equation means your customer understands the value of doing business with you is easier than with someone else. Knowing 'how' you can help your customer beyond even their knowledge means you are looking out for their best interest. You are now adding true value, strengthening the customer bond.
The mantra to keep mastering then? Relationships, Relationships, Relationships.
HAVE A QUESTION OR CONCERN ABOUT YOUR CAREER OR WORKPLACE?
Write to:
Pamela Ruebusch at pamela@tsigroup.com