The Little Guy: winner of tomorrow? Posted by Tomi Heikkinen , Tuesday, September 22, 2009 at 21:20, in Labels: business development, customer overdrive, problem solving, seth godin, startups

Seth Godin happened to post yesterday about understanding business development, a topic I too brushed in my last post about Solving outside the box. I brainstormed some key questions for a sales & marketing manager who would like to develop her business with the help of proactive, eyes-wide-open sales people.

Seth offers a great definition for the term:

Good business development allows businesses to profit by doing something that is tangential to their core mission. Sometimes the profit is so good, it becomes part of their core mission, other times it supports the brand and sometimes it just makes money. And often it's a little guy who can be flexible enough to make things happen.

I love his last sentence. It made me wonder: How much should today's startups, "little guys", rely on detailed business plans, and how much should be left open for flexible business development?

Consider how networked the business world is currently, and how networking further increases. Due to this, startups (and established businesses!) who keep their eyes and ears open are constantly and increasingly bombarded with new openings, ideas and possibilities. (To assess these, Seth offers in his post a great checklist of issues to go through.) For a businessperson who is not just sociable but competent and efficient as well these are an abundant goldmine of profit and fun.

So, are the winner startups of tomorrow the Great Networkers, who have the ability to surf in their general field of business, adjust their core mission and constantly absorb great new openings and possibilities, and thus are hugely profitable? I think so. Firstly I believe Great Networkers are also Great Personal Sellers, due to their ability to solve outside their box. Because of all the people in the world, the customers are most competent to tell the Great Networker how to better her business. And secondly their ability to surf in their business area also deters fatal customer overdrive, being too customer-oriented, that threatens all little guys serving the bigger and/or older boys.

Does your business plan enable you to be a Great Networker? Are you a little guy at the core of your business?

How do we define our business Posted by Tomi Heikkinen , Friday, August 21, 2009 at 10:45, in Labels: business strategy, customer overdrive, marketing myopia, segmentation, tomi heikkinen

In order to pursue profitable growth, companies need to define what exactly is their business. Levitt's Marketing Myopia turned heads and revolutionized executives' viewpoints in this regard alrady back in 1960. Others, Clayton M. Christensen and Michael E. Raynor for example, have given other, similar perspectives for executives. Christensen and Raynor in particular have an interesting viewpoint on segmentation, which they describe in their book The Innovators Solution (2003). According to them, customers hire products [incl. services] to do specific "jobs". These jobs are as numerous as customers have needs. This is in other words a demand-based perspective that directs companies to align their businesses according to specific, select needs their customers have.

All in all, I think Christensen and Raynor have a solid perspective that deserves further observation. All businesses have long been seeking to become customer-oriented or customer-driven - many have succeeded while others have failed. But if companies adopt their perspective, do they face the risks of innovative stagnation and hampered business development caused by customer-overdrive? In many industries, small subcontractors and suppliers who chose to specialize in serving certain customers have hit rock bottom after these customers no longer continued business with them for varying reasons. They were customer-overdriven, and went bust because of it. These businesses had been entangled in processing and handling the current needs of their customers and had dismissed their own business development and innovation work.

Considering the different perspectives and these risks, I came up with this diagram, four perspectives to defining your business.



The diagram shows the classic perspective (aka "we're in the oil business and supply our customer with petroleum"), Levitt's marketing myopic (if you may) perspective, Christensen and Raynor's perspective and a fourth, Proactive customer-oriented perspective.

The fourth perspective is an attempt to fuse the best sides of myopic and demand-based perspectives. The myopic perspective's one groundbreaking advantage is that it expands the innovative horizon of the company - by defining business this way, new growth options become visible for innovative executives. Demand-based perspective's advantage is naturally customer-orientation. Combining these we achieve a viewpoint where we are customer-driven, grow as our customers grow, but also consider the larger horizon of business opportunities. Being customer-driven should not translate to being too focused in day-to-day customer demand satisfaction and to dismissing real out-of-the-box thinking and proactive satisfaction of hidden demands. While explicit and tacit information from customer and their ever-changing needs are essential for companies, they should not rely on them only, but keep a myopic perspective on their own business aswell. By doing so, they can enjoy being customer-oriented but evade risks mentioned above - and escape the danger of customer overdrive.