Five Keys to Success

Profiting From Change

Successful companies are those most adept at understanding how customer needs are likely to change. They choose a clear path, and adjust their course as events unfold. As the explorers who set out to find new trade passages did centuries ago, they plan a route, and refine the map as they go.

Here are five keys to success:

1. Live in your customers’ world

Use your own product or service, and those of your competitors, just as a customer would. Visit customers and watch them buying, using, maintaining and disposing of your product. Talk to customers about the changes they are seeing in their competitive environment and in the economics of their business.

2. Conduct small experiments

More and more, we’re hearing that companies are simply “trying more things” and watching to see which ones work. Intercontinental Hotels created multiple designs for their new Holiday Inn reservations website, put them all online, and found out within a few hours which design customers preferred.

3. Collaborate with purpose

New electronic media increasingly enable customers to participate in marketing, product development, technical support, sales and more. This process reduces cost (when customers perform work previously done by employees) and allows companies to learn from customers at a far faster rate.
Similarly, smart companies are increasingly asking employees to collaborate across geographies and organizational lines. Collaboration helps good ideas bubble up from more sources, and accelerates learning.

4. Rethink “headquarters” and work across geographies

Take strong steps to stay in touch with what’s happening in dispersed geographic markets. Many companies, such as Halliburton, Accenture, and computer maker Lenovo now have no real headquarters location, spreading top executives among several geographies. For example, Lenovo’s top management team is spread between Singapore, North Carolina, Hong Kong, Seattle, and India. The company’s top 20 leaders meet monthly, each time in a different place. These approaches help keep companies from developing “tunnel vision” in a single market.

5. Set a clear direction, but stay flexible

Successful companies paint a clear and compelling picture of the future they wish to create for customers, employees, investors, channel partners, and other stakeholders. By painting this picture, they align decision making, and greatly increase the chance that the picture will become reality. At the same time, they stay flexible. They listen continuously, put feedback loops in place, establish and monitor metrics, and adjust their plans as things change.