What’s the first question leaders need to ask coming out of the Coronavirus pandemic shutdown? Why do they Buy?
Through the Looking Glass with Frank
It was my first opportunity to lead a business acquisition team and one of those inevitable negotiation dilemmas came about between the seller’s team and ours. It doesn’t matter the actual impasse but it was so compelling that as the two teams went to their corners to confer and review bidding, I looked up at the ceiling and questioned why on earth we ever thought this deal might have been a good idea in the first place.
As I sat there rethinking my earlier breakfast buffet choices and the original lure of this “simple straightforward deal” - finding very little benefit for either - I realized our accomplished veteran legal specialist, Frank, was whimsically watching me in my rookie deal leader angst. Mistaking his look for empathy and support, I asked him earnestly which way we should go on this one. He replied, “Depends on where you are heading.” Thanks Frank! I took the bait and said, “That’s what bothers me! I’m not sure where we are heading on this.” His self-assured reply - all together now - “Then any path will get you there.” Wink.
The point I took away from that “Through the Looking Glass” moment is that unless we as leaders really commit and know our business, our value propositions, and where we want to go with these, we can very frequently become lost. It is similar to sitting at one of those decision crossroads listening to Yogi Berra say, “When you come to a fork in the road, take it.” Much as we might try to appear poised and act decisive, without a clear grasp of who we are and where we are going, our leadership, our business and our people inevitably suffer.
In stressful times, such as this coronavirus shutdown and fast approaching comeback, it is essential for leaders to maintain a clear focus and conviction on the essence of who they are as a business, their core values, strengths and capabilities. It is equally important for leaders to reinforce these clearly and concisely with their teams. These value fundamentals are their identity bedrock and define what they ultimately want their business to become in the market.
As we reopen the US economy, if you as a leader feel a bit shaky on this ground, take a breath and go back to fundamentals. And let me offer a suggestion for where to start.
Forget Strategy for now, First identify “Why do they Buy” -
Here’s a thought-provoking question that I also learned from Frank. What are the main reasons that customers buy from us over the other guys – those competitors? What is our actual competitive advantage? What is our “special sauce”? What is the most valued, individual feature of our business that puts us out there with a fighting chance? Hopefully you have more than one defining trait or offering in your business but understanding what it is and how it is used to win in the marketplace is fundamental to knowing yourself, making big decisions and doing business.
By the way, your competitive advantage is a very relative concept. It may not be best in the world, but by your market standards it should be best in class. Many executives and company leaders don’t really have a handle on why they are better, faster, less expensive than their competitors… or why they are not.
For real Answers, Ask your People -
Your team wants to win and will work at their peak level when they are engaged and involved. Ask them “Why” the customers buy. Answers may vary… a lot! The sales and marketing teams may insist it’s due to their intimate customer relationships and sparkling product demos. The operations team may tell you it’s the strength and efficiency of their production process. The senior leaders may laud their vision, market presence and active social awareness. The finance team will undoubtedly say it’s those damn low prices.
Responses from your team can reveal a lot about the individuals, their focus, competitiveness, pride (or even confusion), but they really will be fairly predictable. The more precise answer though is that there are one or two major strengths that are your basic competitive advantages relative to competitors. These advantages really define the business and contribute most to its relative success in the market.
Then Find your Strengths and Focus your Strategy -
After getting the predictable answers, I suggest putting the teams to work around the following plan.
Assign mixed discipline teams of your best people to analyze major areas of your business, looking for either “best in class” conditions or weaker areas where specific help is needed. Assign individual top company leaders to empower and facilitate each team’s work.
Teams then present findings in these key competitive advantage focus areas.
Market perceptions or positions
Customer alignment and intimacy
Key resources or capabilities across the enterprise
Operations and supply chain cost-effectiveness
Differentiated products, technologies, IP advantages
Partner company relationships that help you win and grow
Innovations specific to your business, products, services or market
3. Now build a strategic plan based on fundamental business strengths. Resulting actions should:
Focus and build on your competitive advantages. Fortify identified, specific strengths
Outsource needed but non-competitive functions, services, product lines, tasks, etc.
Reorganize, dissolve or discard inefficient or non-essential relationships and/or cost areas
Now lead your team with engaged focus and go execute!
Finding and betting on your competitive strengths may sound simple but to be effective this work should be systematic and completely honest. It should involve client teams and customer voices at all levels. Truth is that as the teams do the work, the realities will come clear. Business leaders and teams with keen understanding and buy-in of their real competitive advantages will see a magic lifting function as US markets open up and businesses get back on the field. It really does start with that question… “Why do They Buy?”
DK Dameron