In the quest for sustained growth, too many organizations take a linear approach: they keep doing what they're already doing, and try to do it better. By failing to seek out new opportunities or taking into consideration changing market conditions, you can root yourself too firmly in the current climate, risking vulnerability to competitors' innovations. To create a mechanism for sustained growth we recommend thinking more broadly and strategically.
Companies that stand the test of time usually do three things really well:
1) Know their core competencies, their strengths in the marketplace
2) Constantly assess their market and understand potential opportunity, be it in geography, industry or customer
3) Understand the intersection between their core competencies and their market to anticipate innovation and reinvent themselves accordingly
As non-profit entrepreneur and tech innovator Ndubuisi Ekekwe notes in "Beyond Core Competence," market leaders "must be ready to go beyond their core competence and its associated core products and markets of today, which may be irrelevant tomorrow, to evolve and prosper. And the ability to do that may become a new core competence."
"When defining core competence, be careful not to confuse what you sell with what you're really good at."
When defining core competence, be careful not to confuse what you sell with what you're really good at. Ask yourself and your customers, what are the capabilities that you have as a company that can be leveraged to potentially serve other markets in a new way. Deep down at the core, what do you do well?
Netflix, one of the leaders in the cord-cutting revolution disrupting digital media delivery across American households, could easily have misidentified mail-order DVD rental as its core competence, leaving it stuck in a shrinking market. Instead, the company had the insight to recognize content distribution as its true strength. This broad, strategic view allowed the company to move into streaming video and original content, remaining on the vanguard of home entertainment.
Thinking about who your ideal customer is can help you figure out your core competencies. Talk to customers, and employees on the front lines, to find out what you're known for in the marketplace. In "Do Your Customers Even Care About Your Core Competencies?" MIT research fellow a Michael Schrage recommends a collaborative approach, advising: "Core competencies should be platforms for customer – and customer-sensitive supplier – collaboration, not proprietary silos of exclusive expertise."
Involving your customers in the process will benefit all parties. "Give your customers the tools and the opportunity to make your core competencies more valuable to the both of you," promises Schrage.
Identifying your core competencies and your market potential, understanding where they align, and harnessing the intersection points as opportunities for innovation will help create a mechanism for sustained growth, instead of short-term success.
Ready to learn more about the habits necessary to generate sustained growth? Download the eBook: "Stop Overthinking Strategy: Two Simple Questions that Lead to Growth"
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