[Webinar On-Demand] 5 Core Competencies Needed To Thrive In A Post-Crisis World
The Next Stage of Industrial Darwinism Is Here.
Against the backdrop of a bona fide socioeconomic seismic shift, it will be survival of the fittest. Mere reductions in costs or resuming business-as-usual will not be enough to compete against companies that make rapid adaptation a key part of their current and future business plans.
After 1-hour you will take away from this webinar:
- A clear understanding of why legacy commercialization strategies and operating models will be less effective going forward
- How to create a company culture that prioritizes agility and innovation
- Customer-centric strategies for inspiring loyalty in today’s landscape
- An integrated go-to-market framework for driving post-crisis growth
- The confidence and sense of urgency to start preparing for the next disruption
Register to watch it on-demand:
James Dorn: Hello and welcome to today’s webinar, The Five Core Competencies Needed to Thrive in a Post-Crisis World. Thank you everyone for taking the time out of your busy schedules to be with us here today. I am James Dorn, the President, CEO, and second-generation owner of the Dorn Group. I’ll be moderating today’s webinar and introducing you to another team member who will be presenting today’s content.
Before we jump in, I’d like to cover a few housekeeping items here. First, today will be a one-hour session. We’ll spend about 45 minutes on the five core competencies needed to thrive. They’ll include innovation, customer retention, new customer acquisition, digital commerce, and finally virtual engagement. Thereafter, we’ll spend about 15 minutes on a live Q&A. If you have questions along the way, please feel free to write them in the Q&A panel of today’s meeting. We’ll answer those questions at the end. If we don’t get through all of them, don’t worry, we’ll answer those offline. Then, everyone who’s attending today will get a recording of this session that will include those questions.
Just a little bit on the content here, a little background, that is, today’s content was inspired by a white paper that we recently published, titled The Future is Now: Driving Growth in a Post-crisis World. This concept was based on over 100 executive interviews that we conducted throughout the crisis here, interviewing manufacturing leaders, leaders from private equity, and really seeing what was going on in their business and how they’re reacting to it. We’ll cover that content today in today’s webinar, but if you don’t have a copy of this white paper, feel free to go to dorngroup.com/whitepaper and download your own copy of that.
Also, on this content, some of the content we won’t cover today, but we’re going to be having subsequent webinars. Here’s a quick schedule of what we’re planning for the rest of this year and upcoming next year. The next one is going to be October 28th and that will be a deep dive into innovation. Be sure you attend that one. If you’re attending today, you’ll receive an email notifying you of these upcoming webinars.
The next slide here is – just one more slide before we get into the content – but this is just a little bit of an explanation of the Dorn Group just to give you some context as to the material we’re covering today and why.
Dorn Group is a revenue growth consultancy out in the Chicagoland area and we help clients map out new strategies for revenue growth. Our pursuits as a firm and our promise to our clients is that we will help you achieve higher margin revenue growth and we’ll help you achieve that faster. We do this by providing you with the expertise of driving growth for manufacturing, but also the resources you need to actually implement those growth strategies.
With that, I will introduce you to J Schneider and we will dive into today’s content. J Schneider is going to be walking you through today’s content. He is the managing director of our consulting practice here at Dorn. J, take it away.
J Schneider: Thanks, James. Thank you everybody for joining today and welcome and good afternoon. I’m pleased to have the opportunity to share this webinar with you today, five core competencies needed to thrive in a post-crisis world. As James mentioned, my name is J Schneider and I’m the Managing Director at Dorn Group here in Geneva, Illinois. As we begin our webinar today, I hope that many of you have had the opportunity to read and reflect on the recent white paper that we released earlier this month.
Today, we’ll review our thoughts and strategies to ensure your firm is ready for life after COVID or any other future crisis that we face. As we begin this afternoon, I wanted to pose a few questions back to you to reflect you on your own business. How is your performance been? What areas of the business have you changed to meet the challenges of the last year and how has that gone? Are those changes here to stay or do you envision going back to the prior way of doing business? Consider the idea that everyone is changing, not just you. What have you noticed from your competitors? In today’s current environment, we’re all facing the same challenges and issues with various paths to overcome them.
Think about the next stage of industrial Darwinism, adapt or die and really the question is, is that how have you adapted over the last few years? Your traditional means of survival may not be enough to compete but if there was ever a year to highlight what disruption will look like and how we would have to change our behavior to overcome that disruption, 2020 would be the poster child. Would you historically consider your company as forward-thinking a few years ago? I would bet today that you have a different view on your company’s ability to adjust, adapt to an unpredictable market. But leaders who make a rapid innovation have an advantage. That’s just kind of the reality and I’ll go through some material today. They’ll kind of highlight why that’s the case and what your firm can do to make sure you’re the one that can grow and survive post-crisis.
Consider how business is done today versus what’s been done or what will be needed in the future, and what changes are required to be successful? Looking backward and I’ll say this a little bit more often today, but looking backward may not be the path forward for your firm post-crisis or post COVID. What does your success look like and business model look like within your existing operating model? Consider and reflect on your own business and what step changes are needed to ensure that you can survive and prosper moving forward.
How will your team pivot to drive revenue growth in this new landscape? I have a few of these thought-provoking ideas spread out throughout today’s webinar to kind of reflect back and understand where you can win and where opportunity for your firm exists.
Moving forward, what are the implications of disruption? In the National Association of Manufacturers, surveyed 558 respondents and they all said – effectively said – that financial impact was their biggest issue. About half, a 53.1%, anticipated that their operations would need to change and around a third of those would face supply chain disruption. I’m confident that all of you, at some level, have experienced some of these issues and impacts your business over the last year. But if you look at the implications of what you did or what you can do during disruption, I wanted to point out a few bullets here on the screen for you today.
When disruption happens or a crisis occurs, many companies tend to deprioritize innovation, to name a few things. Often, they will contract their business, their operations and instead of concentrating on growth or concentrating in areas because it’s difficult to see where their next dollar is going to come from. They tend to focus on these five areas:
- Shoring up their business. I’m sure many of you that’s no different than others to ensure that your core business was intact during this disruption.
- Pursuing known opportunity spaces, right? Was there an opportunity or was there a moment where you could go after new growth opportunities in the last year where you felt there was low risk?
- Conserving cash, minimizing the risk of your business and then waiting until there was more clarity. Clarity and risk were two big issues that we found in our survey of the 100 CEOs that we spoke to in developing the white paper. Can I see the future and what risks do I have in anticipating any changes to come that I can’t see yet?
But resisting the legacy paradigms is going to be key to the discussion today, but also to your success moving forward.
Consider where your firm can find new opportunities during this disruption and post-disruption. Measure those risks associated with it and adapt your operating model. We’re going to talk about that a little bit more today about what your operating model looks like today versus what it will look like in the future and where areas your business you should focus on.
With the massive disruption being accelerated by COVID-19, the future belongs to those who can manage uncertainty and innovate rapidly. I want to talk a little bit about that just for a brief moment. Manage uncertainty and innovate rapidly and those are going to be two themes that you’ll see today in our discussion. Can you adapt quickly? Can you innovate within the environment that you operate in? Can you do that to create differentiated value to your customers?
Uncertainty is probably going to be in your vocabulary for a short while, if not a long while, and how you navigate that uncertainty will be the difference between whether you succeed or are average in the marketplace.
Here, we talk about previous go-to-market strategies and commercial operating models. What you did in the past simply will not be as effective as it is in the future. Precedent is going to be difficult to find here. In the middle area here, what we see is how manufacturers have experienced disruption over the last year. Many of these are not foreign to you and certainly would be familiar if we went through each of these in detail but if you look at shifts in market demand, new buyer needs, virtual customer engagement and eCommerce systems and infrastructure, a lot of this has changed.
Your core market indexes are recessed. Noncore new market entries may be required but difficult to see. Your buyers’ needs are changing. They’re going to continue to change over this period. You’ve had to adapt a virtual customer engagement and so forth. Whether it be your sales guys out in the field, the way your customer service team interacts with your customers, less of it is in person and more of it will be through virtual channels in the future. Then, customers are purchasing more through virtual channels. This was a trend that started before COVID, but COVID and the recent pandemic has certainly made it top priority.
On the left, I gave you a few points I wanted to review today. One is the shifts in buyer demand. That’s going to be a big piece of how you operate your business moving forward, but looking backwards will not necessarily give you the answer you’re looking for. Understanding how those channels operate, accommodating those needs with those customers, understanding those needs a little deeper and better than you had in the past can make all the difference of your success moving forward.
Examples of your ability to adapt and how you can provide for your firm would be adapting your core to meet the shifting buyer needs as an example. What does your core really look like and we’ll talk a little bit more about that today. Identifying and quickly addressing new opportunities, there, again, quickly and rapidly being able to adjust to a change and rapidly changing market will make all the difference. And then building a foundation for post-crisis growth to remain competitive. That foundational piece, which may have been built during the last year, will continue to need to be built and continue to be a focus of your organization moving forward.
On the right side of our screen, I give you a few B2B critical questions that I think you should be asking yourselves over the next 6 to 12 weeks as we round out the year. Are we in a position to enter markets with accelerated demand that attract new customers? What does that look like? Do we need to start producing products that today’s buyers are seeking in volume? Do we know what those buyers are seeking? We know what they asked for during the crisis to some extent, but what are they really going to be needing post-crisis? Then, how can product management sales or marketing and functional groups act as one in delivering that compelling experience for those customers, because that’s what they’ll be looking for in our experience. Should we be shifting our selling responsibilities from a sealed field sales force to an inside or digital sales teams?
This is a trend that we saw very, very popular during the last year is where the sales team couldn’t be out in the field and now you need to find new ways of engaging your customers. That digital inside sales team became a highly valuable asset and resource for your firm’s to capture those sales, but is now the time to build the infrastructure and capture more revenue through digital commerce and should we consider offering direct selling versus through-channel or distribution, we may not have considered that in the past to accommodate your new buyer preferences. These are things that I want you to take a look at are critical to look at over the next 6 to 12 weeks as you finish the year and you think about your annual plan or your next year for 2021.
Adapting your go-to-market strategy to win through disruption. I want to spend a few minutes diving into adapting your go-to-market strategy and this is really kind of the essence of what we’re going to be talking today and going through.
McKinsey did a study post 2008-2009 recession of about 1000 companies. They’ve found about 10% of them did better than their peers but why is that they did better than their peers? What they discovered is that those 10% were focused on growth across their company and made investments in their business and innovation. Now, that can vary by company but the companies that took a proactive approach, a company-wide innovation strategy made a difference post-recession, where they actually fair 10% better than their peers in the same category. But let’s consider the five capabilities to win through disruption in the middle of this chart.
What you’ll see there is a capability step change; one, innovation, customer retention, new customer acquisition, digital eCommerce and virtual engagement. We think about those step change capabilities. Let’s talk about what that means. At override, or your overarching of that is the overall customer experience and how are we delivering a better, more unified customer experience to the customers both we have today and the ones that we seek to attract in the future. But underpinning this is culture, the culture of your organization to deliver on this post-crisis market.
In innovation, it could be as simple as what do we sell now? What products or services do we offer that may or may have not offered in the past, but innovation doesn’t necessarily need to be just about product and we’ll talk about that in a few minutes. With customer retention, it’s around how to keep customers longer, maximizing the value of each customer, train and deploy those teams to run. Retention and cross-selling and upselling programs are going to be key to your success.
The third one or in the middle is how to attract new customers, right? Expand your customer-base from existing in new markets and understanding where you can capture those customers and where they are. Pinpoint demand opportunities attract new customers where you may not have sought those before. In a post-crisis world, you may be looking in areas in the market, which you did not think were attractive, which may be even more attractive to you today than they were in the past. That’s where you may find a bulk, if not a sizable measure, of your new customers.
The fourth digital eCommerce, developing automated, personalized, friction-free digital buying experiences and making it easy for the customers to buy. Are they able to get your goods and services quickly and easily? Are they able to understand what it is they’re buying so they can make that purchase decision simply and then building the system and infrastructure to do that.
Now, you don’t necessarily need to get there on day one but moving toward that and building that foundation, I think will put you in a stronger position in 2021 and beyond to capture that digital eCommerce business.
Then, the last one around how to engage more effectively is around virtually engaging and attracting, nurturing, and converting those customers through the virtual means where you may not have outside sales guys out in the field, going to trade shows maybe like you had in the past, going to seminars or even trade association meetings. Those are more difficult now and they just necessarily haven’t proved to be as effective as maybe they were in the past and certainly that was a changing trend anyway but that virtual engagement will be a critical means for you to drive your business forward and effectively retain and build a customer base.
The question is, is how do customers interact with you today, embracing customer experience as a total experience. How customers perceive their direct and indirect interactions with your brand. If you look at the chart in the middle what we’ve highlighted at the top is customer lifecycle phases. This is effectively the buyer journey. As you look at education, through solution, selection and loyalty and then they continued to loyalty to reselect and repurchase of your new products and new innovation but continuously examine that experience and that satisfaction of the customer and what you’ll see on that chart in the middle and the left is your functional groups, your marketing, sales, even your distributor partners, product management, customer service or technical support, even engineering, and where they involve or where they are involved in that buyer lifecycle phase.
You can see that traditionally, you may say, well, sales or even your distributor may carry a huge burden of that but the reality is the customer experience is the total experience, whether it’s your technical support group, your customer service, your product management team that may be in or outside the office on a given day talking or working with customers, as well as your traditional sales and marketing function. All of those and each functional group has a significant role in influencing that customer experience but take control of that customer journey, actively manage it. We’ll talk about that more as we go through today’s webinar.
Shift your mindset for inevitable disruption. While disruption occurred pretty significantly over the last year, we should expect that that will continue at some level over the next year but operating your business in and within that disruption model and becoming good, becoming efficient at that, will make the difference in your business today.
Internal change management best practices, which we’ll talk as well later on in today’s webinar, will ensure that you are prepared. Do you have the culture? Is your culture ready for this type of operating model? Then, rapid innovation and agility are key.
On the right hand side, I give you a few ways to improve your customer experience strategy. I’ll highlight a couple of them today but map that customer experience journey. Literally, map it out, understand that, understand what your customers value is, identifying rank, the existing and potential customer touch points and then monitor and create a voice of the customer feedback loops, which is ever more important than it was in the past. You may do that virtually today but I think you need to continue to do that as you move forward.
On the bottom right hand corner, we talked a little bit about four best practices that can frame short-term responses. Focus on care and connecting with your customers, meeting customers where they are today and that’s effectively understanding how they operate their business and understanding what they do to make money, re-imaging customer experience for a post COVID-19 world or reimagine, I should say. Don’t think of it necessarily in historic terms. Think of it as what it will look like moving forward and then building capabilities for a fast changing environment. I almost can’t stress that enough and even may sound like a broken record to some extent but that fast changing environment will allow you to adapt and be agile in the way that you run your business to keep up with your competitors, as well and more importantly, as your customers.
Whoever said the only two things certain in life are death and taxes was wrong. The third is economic downturns. We certainly experienced that over the last year. Prepare accordingly. No one could have predicted the level of disruption that we saw over the last year due to COVID and the economy and the shutdown but we can also expect this will not be the last time that we will face this as a nation as well as our individual businesses. There will be crisis and pandemics and challenges in the future and then how we do that and how we navigate that will make the difference about how we come out of it, whether we’re stronger or weaker, post-crisis in the future.
Let’s talk about the first one or dive into the first competency, innovation. One is dear near to my heart for many, many years, adapt or die we’ve talked about in the beginning. It really is innovate or die and innovation has been tough over the last year. It’s been tough over the last several years, right? It’s a highly competitive market. Innovation is expensive but the reality is if you don’t innovate across your business and I’m not necessarily just talking about products, it will be difficult to succeed.
Innovation is iterative. Do not think of it or you should not think of it as really a linear model of the past. I start with point A, an idea and I finish with a product and I sell that product for 10 or 20 years and then on I go. It’s iterative. You’re constantly looking at your business, the operating model of your business, you’re looking at the products and services that you offer but you’re also looking at other factors about how you distribute, sell, and ship product. Take a view from your customers’ perspective. Sit in their shoes. Understand their business. How do they make money from you as a company? Is it because of the information or the technology you give them or is it because of the way that you ship and deliver or engineer products?
Innovation is an organizational focus and not just those of a few in the company. If engineering is rarely focused on R&D, is probably squarely in the wrong place. It really is a company-wide issue and initiative. Ensure you understand the changing landscape and innovation is the future value of your company.
On the chart on the right hand side, which I hope you’ve had a chance to take a look at already, really kind of highlights five key areas of that. Is your innovation repeatable? Can the firm repeat and consistently provide products and services to the market as it had in the past? Is it open innovation, meaning, is it outside in? Does it consider the market as a whole your customers’ needs, your customers’ business? Is it training? Is your organizational trained? Is your distributors’ trained? Do your customers understand how to use the products that you innovated? Many times the customers may get product and not understand all the features or benefit that really provides them and so it’s underused or underleveraged innovation. Is it evolved? Is it constantly evolving? Are you constantly pushing the envelope with that innovation? Collaborative, meaning that it isn’t necessarily just one functional group in your company, it’s multiple groups within your company and I think that’s imperative as you look that innovation can really be sourced from anywhere within your organization or outside your organization.
We look at those five as really key. Underscoring that is your overall corporate strategy, the leadership and the resources apply to that, employees, facilities and culture and I can’t stress cultural enough because that will and can make a significant difference in how you navigate through crisis moving forward.
Let’s dive into the second competency, which is customer retention. We’ve all heard this before, what is more valuable, the customer I have or the customer I need to get? They both have tremendous value but you certainly don’t want to lose the one you already have, that we know for sure, particularly during a crisis.
Building a case for retention is really around compounding your revenue gains, SG&A savings and creating new EBITDA threshold within your business. To thrive in a disruptive market, it is key. You don’t want to lose the customers you have but there is a balanced approach between acquiring new customers and retaining the ones you have. You will continue to need to drive and win new customers, which we’ll talk about in the next slide but retaining existing customers is imperative. Reducing customer churn will add incremental value.
On the right hand side, we’ll talk about is that if you continue to retain your customers over the long period or the long term, you’ll get incremental gain in both revenue, you’ll get incremental gain in EBITDA, your savings, your SG&A will go down because your cost of acquisition would be steady or flat or in some cases declining. I think it’s from our perspective, and certainly, the CEOs that we interviewed during the research here is that customer retention, overall has a significant positive benefit to your business, certainly through disruption.
Then, know your customers well. I can’t stress that enough at the end, right? If you don’t know them well enough to retain them, they’re going to leave or they may seek solutions elsewhere. Existing customers will repay you with their loyalty if you take interest in their business, if you develop services and products through an innovation culture that will ultimately help their business grow, you will find that’s a highly loyal customer for you moving forward.
Let’s dive into the third competency, new customer acquisition. We think about growth at your company, who is tasked with focusing it on every day? Is it your sales department, your marketing group, management, product management, customer service? Where does that fall today, but think about attacking growth in a different way. Consider adding or creating a growth task force, I have highlighted here on the screen, to your organization who can keep the org focused where your customers will come from. Utilize cross functional teams within your organization and attack the market in an agile way for your target customers.
Let me kind of highlight a couple things here. With a growth taskforce and an organizational cross functional team that’s managing that, you’re going to draw on many elements within your organization to provide value and agile value to your customers through a variety of different ways, whether it’s multichannel engagement, data and analytics, interaction and planning, these programs will allow you to go after your customers or new customers and new markets but a growth task force, which we’ll talk about as well and establishing that will allow you and your operating model to go after those new customers.
People are individuals that are cross functionally focused on driving and capturing those customers for your organization. Data will be used holistically here. Use the data you have. Seek new data that you don’t have to find and capture those new customers. Consider a special task force we’ve talked about but it doesn’t necessarily have to be large or complex. Keep it simple. Keep it focused. Their purview is finding new customers, not just retaining the ones we have.
Think of them as an innovation lab. What I mean by that is do things that are different. Try new tactics and new strategies. Develop new go-to-market formulas. It is okay to try things here and not necessarily succeed on the first time but look for little wins, compound those wins and turn those into big wins throughout next year or post pandemic. Focus on scaling your successes and allocate the resources as you grow. That’s important. Don’t necessarily don’t have the resources to put five people in a task force. Put one, put two or put three, as an example. Start with something that you can manage as an organization and that you can put focus on it. It doesn’t have to be an all-encompassing task force on day one. It can grow and scale as you grow and scale.
Let’s move to the fourth core competency, which is digital commerce. Artificial intelligence has been a buzzword for years now but the reality is, it’s here and it’s here to stay. It isn’t going anywhere anytime soon and it’s no longer science fiction or future technology. It is how companies will create an advantage for themselves moving forward, whether it’s through artificial intelligence in trucking or data analysis. There are a variety of ways that we can talk about how that’s going to impact your business but because disruption is inevitable and new disruption seem to be the new normal or the next normal or however you want to describe that, it’s going to be revolutionary technology for your business.
Now, it doesn’t necessarily mean that you go out and you just decide I’m going to go full in all AI and figure out how we’re going to make that work. Take steps toward that. Move toward a more AI-based digital commerce platform using whether its partners, partners like Dorn or others in the market that you can rely on that will help navigate those with you, that you can make those effective tools in your business, to capture new opportunities and reach new customers but more importantly, understanding the customers you have so you can target them more efficiently, get the products that they really desire or that they are looking for and be able to close those sales in a highly volatile and disruptive market.
Digital commerce is here to stay. Ten years ago, if you didn’t have digital commerce, maybe you did okay, maybe you didn’t do okay but today, it’s imperative for your business and it will continue to be that for business to B2B companies. The post-crisis growth will require new emerging strategies. The strategies that we’re talking about today, most likely will be irrelevant 5 or 10 years from now continue to evolve, continue to make incremental investments.
Now, on the bottom right hand side, I want to give you kind of your top 10 ways that AI can boost your capabilities across the business. It could be things as much as recommendations to your customers, localizations, how you send out promotions, your customer service team, the information they have, what they understand about the customer, how they respond to issues, the analytics of your customers’ performance, their profitability, their data to your firm, help you with fraud protection, logistics and pricing, understanding where your competitors are and how pricing impacts your volume and demand, the merchandising at a point of sale or even virtual merchandising, as well as people just being able to simply find you exist and have a product that they’re looking for. Those are all 10 really, really basic, straightforward ways that AI can help your business today. Do not start with all 10. Look at a few of these, two or three and understand how those two or three can make a change or impact in your business today.
If we move to the last competency, which is virtual engagement, in virtual engagement, what we’re talking about here is the idea of boots on the streets may not be the path for you to invest in moving forward. What does that mean? How can you capture additional revenue from all of your customers, not just a few of them? If you look at the chart here, most companies will focus on the 80, the core of their customer base, and they spend a lot of time there, the cost to serve those customers of finding new revenue streams of those customers but that virtual engagement will certainly help you with your core, the head, the neck, as well as the tail of your customer base. You will see a significant or can observe a significant increase in your business by virtually engaging all your customers throughout your entire portfolio, the interacting less in person and more through virtual channels today will be the mode, model that you use, most likely moving forward. That’s a trend that we do not expect to see changing, at least for the next several years.
The legacy go-to-market strategies that centered around in-person sales are probably the way are slowly changing or quickly changing because they’re just not practical in today’s environment and they may not be practical, even outside of a post-COVID world. Industrial B2B customers are expecting personalized, frictionless interaction but they’re expecting it in virtual ways as well similar to what they experienced in B2C environments.
By 2025, it’s estimated that most B2B customers will have online touchpoint, at least some stage during the research of purchase, that the idea that there will not be any or there would be no online or virtual engagement, is just a thing of the past. Customers are expected to be engaged virtually from this point moving forward and as a business moving that direction will help you capture those customers moving forward.
We also have other dataset, more than half of industrial transactions will be induced online. That’s a significant change of where we were just a few short years ago. If your business strategies aren’t reflecting these changes or trends, you need to reassess them the following areas right. I’ll give you a couple ideas here to think about, one, advancing online marketing capabilities. Think about what that means for your company and what your business is. Are you able to invest in those online capabilities? What investment should you be making to engage those customers?
Second is optimize a physical field force. Do you have too many guys in the field? I’m not suggesting that you don’t need field guys. You do. The question is, are the right field guys in the right markets for your business? Are they the right individuals in the right markets for your business tomorrow? That’s the question that you need to assess on the table today. Increase order fulfillment customers service capabilities through virtual engagement. Make it easy for it. Make it simple, frictionless and advanced data and technology improvements will help you understand where you pull those levers and what investments you will make.
Here, we’re talking about in the next slide here is winning culture. Culture is really everything here. Now, getting the team aligned can be harder and determine the path that you take post-crisis. Getting that team in lockstep with your strategy and committing to that change can be difficult whether you focus on innovation or customer acquisition as a top priority, your culture will determine your ability to succeed. Remember, companies don’t change, people do. What you’re looking for here is understanding how your culture will facilitate the changes needed to operate as efficiently and effectively as possible in a post covert or crisis world. I’ll give you some tips here.
Here are five tips to get you started and laying a strong groundwork for change or even change management. If change management is not in your vocabulary as a company today, it will be and it should be moving forward. That is the mode that you’ll be operating it.
One, identify the risks involved with your new strategy. Use those risks to map out a smart change management plan. If you don’t have a change management plan or something that you maybe not considered in the past, reach out to us. We can certainly help in understanding how you may be able to do that and efficient ways to look at that. Establish buy-in with key stakeholders, understanding do they understand the vision and where the company is going and how they’re going to navigate through that change. Communicate your plans and your change for the entire team.
I can’t stress this enough, in times like this and in times where you have changed and the culture is shifting, over-communicating will be your friend. It may seem redundant in many ways. You can’t do it enough. That’s my experience over the last 25 years of doing this. Actively remove barriers and demonstrate what good looks like to your team. What is the new expectation? Agility and your ability to adapt to that change are going to be key. Repeat this as often as needed as your culture changes, as your vision of the organization is modified, that’s going to be imperative for you guys to have a winning organization moving forward.
Shifting gears from business continuity to developing an agile strategy for growth will be imperative for achieving success moving forward. Business continuity, developing an agile strategy and I want you to think about those as we go through the last remaining parts of today’s presentation.
Here, an integrated approach to post-crisis growth and this is really where we get down to we talked about the five competencies, but what does that really mean, right? What is a go-to-market? Okay, we reviewed the five competencies, but how do you begin to implement this within your organization? What is a go-to-market strategy? You asked 10 people, you’ll probably get 10 different answers but here is our approach to answering that question.
On the left side of this graphic, what you’ll see is customer experience design or really, what we’re talking about here is value more, specifically engineered value, the value your engineering into your business and to your customers. On the right hand side, we’re talking about delivery of that value to your sales or customer service or marketing or product channels, the operations but here, ultimately, we’re talking about a new go-to-market strategy that allows you to adapt your operating model to go and capture new opportunities, new customers, and win in the market today.
Your go-to-market strategy will be your guide to move forward. I’ll give you a few points here. Identify the markets you serve. What customers you target, the products and solutions you offer, the route to market as well as the value proposition and what you’re inherently about as a company, adapt your go-to-market strategy constantly. Some markets change rapidly. Build a new foundational operating model within your business using a go-to-market strategy, which highlights and focuses on the engineered value, as well as the delivery of that value.
There’s really two parts to that strategy. If you think about all the things on the left that you’ll see here, everything from market opportunity, through alignment and resource allocation, all the way through delivery, think about it in those two parts; engineered value and delivery to your customers and the degree at which you can advance that capability and using those five core competencies to execute this, will allow you to be success or realize failure, both post and mid crisis.
Now, I’m not trying to scare anybody there but this is really kind of the heart of what we wanted to show you today is understanding, creating that value, and then delivering that value but a go-to-market strategy and an operating model that allows you to do that is really the foundation to make that happen.
When mastering applying these competencies to your go-to-market strategy, you got to break thing down into two areas, which we just did in the slide before but I want to give you a little bit more in depth dialogue around that. Customer experience, designed engineered value, determined who, what, where, when, and how you’re going to engineer that guy. We think of these as the most important areas to revisit. Think about how you’re going to revisit those. Break it down as simply as who and what. Start there as an example, then move to where and when and how you can ultimately decide on based on who, what and where.
Your market opportunities, the innovation of pricing portfolio, your customer segmentation, all the way through the alignment and resources and the intelligence you’re using to make those decisions, we’ve all seen it before, right? Bad data in is usually garbage outs. Really make sure you understand the intelligence of the data that you have to create that value to your end customer. We look at delivery, that customer experience delivery, activating your strategy. When we talk about activating, it’s deploying it. It’s leveraging that to your advantage in the market on a day-to-day basis, not a month to month basis. If you’re looking at your go-to-market strategy three times or four times a year, it’s probably not enough. That’s typically something you’re going to reference on a daily, weekly basis, certainly in the beginning, but that is your guideposts. Those are your guide rails for you to operate as a company.
Sales, customer service and product and marketing, are the areas that you’re going to ultimately end up using to deliver that value. A well-planned strategy, optimize those sales teams and budgets all the way through customer service and be able to provide those customers a virtual experience, are going to be really, really key for you guys in this next year or two. Determine which products are absolutely essential. If you’ve got deadweight products, now is probably the time to get rid of them. You got products your customers kind of value, but they don’t, they’re not willing to pay you for, revisit the pricing, revisit the innovation in that product and consider whether or not you want them or you need to reengineer them or do something else.
Then, using a customer-centric approach, right? Often companies will look from their view out to the customer and portray that view to their customer-base and segment their customers based on how they organize their company. Take that customer view. Use that approach to your virtual engagement, your digital eCommerce, you will find that if you can resonate and put it in their words, in their view and their vernacular, it’ll be much easier to reach them and tell them about you and what you do and how you guys can help them grow their business.
Prioritize agility and speed. When developing your commercial operating model, agility and speed are going to be key to your success. A commercial operating model should comprise of high level structure and underlying processes but if you look at the chart on the right hand side is where I really want to start, think about accelerating that lift and revenue. At your current run rate, any incremental gain you make during this time of disruption, even if it’s small, will compound growth for you in the future and that’s what we highlight here in points one and points three. Accelerated lift, apply an accelerated work today, and capturing just a modest growth in market share or customer-base will allow you to compound year over year gain and that customer retention, which we talked about as our second capability or competency. Those year-over-year gains will give you an additional revenue stream that you did not have before.
The idea of maybe waiting and say let’s see how this is going to play out, any customer you can capture today and retain will give you additional incremental growth X fold in the future because you would have retained them earlier than you otherwise would maybe a year from now or six months from now. You will see that perpetual gain in CAGR through your EBITDA and operating income or whatever measure you’re using to measure the health of your business.
Again, agile and aligning your corporate business strategy to help streamline your product marketing sales will be key here. If your internal teams are not aligned in how to win and grow those customers, it will be difficult culturally to capture that customer. Get those teams aligned. Get them in a room, organize the vision and the strategy together, and then execute on that together.
Speed, I can’t stress that enough. Again, we talked about your ability to capture those customers today. Speed leads to larger gains. That’s going to be your imperative to win here. If you can capture that customer next week versus next quarter, that’s in your advantage and you should be able to capture that gain moving forward.
Here, brings us to the last slide. We have about 15 minutes left for today. I want to revisit what we talked about early on in the webinar today. Disruption has resulted in the acceleration of new business models. We know this, right? Organizational design and interaction and with revenues and profitability at risk. Let me highlight that, again, revenues and profitability at risk. I bold that for a reason. All companies should focus on rapidly advancing toward the core competencies. If you’re not doing these at all, start doing them. If you are not doing them well, think about ways to do them better, whether it be internal or with external help, think about ways to improve the areas within your business that you need, right? Think about new demands of a new world.
Looking backward, using your past experience may not give you the formula for success moving forward. How you operated business in the past isn’t necessarily how you’re going to operate or what operate business in the future, right. Looking backward is not necessarily your success here.
If I highlight these again, innovation, customer retention, new customer acquisition, digital eCommerce and virtual engagement, I could argue, I know many of you can argue, there may be a sixth, seventh or eighth of these but we found through our research and our interviews and discussions out in the market that these were the five most important that we found our customers were focused on and they felt what would allow them to be successful in a post COVID world.
Again, if you don’t have these embedded in your culture today, if these are new ideas or new areas in your culture, take it one at a time. Understand how innovation or customer retention and shoring those up can help your business today, how that can give you compounded wins and growth within your market moving forward but overriding all of this is an improved customer experience, how to reach and engage that customer moving forward and what they’re looking for from you through this disruption as well as into the future.
On the last slide here, what we have is a self-assessment exercise. I wanted to put this in here today because really what this is, is to allow you, the audience, in kind of your company team members to really take a self-reflected look on your own business, whether it’s innovation through virtual engagement. Are you underdeveloped or highly developed in these areas? Rate yourself. Is your innovation strategy limited? Limited ambition, focus or clarity? Does it really not have a purpose? Are you chasing or are you leading or in some cases, you have a highly relevant of the trends and focused it’s based on relevant data, you have strong customer feedback in the market that says, “Hey, this is what we want. This is what we’re looking for,” and we acknowledge that customers can always tell you this is exactly what I want but is it based and grounded in customer data? Even if you look at new customer acquisition, is it a passive or active culture there? Is it a highly functioning culture? Is the DNA of the organization about acquiring new customers? Is that inherently who you are as a company?
We wanted to put this self-assessment in here. We’d be more than happy to send this out to you to really kind of give you an opportunity to discuss within your teams internally how you would rate yourselves, where you really are in this ability and your ability to adapt and implement these five core competencies for a post-crisis world or even outside of a post-crisis world moving forward.
I hope that you found today’s information helpful. We’re going to open it up for questions. We have about 10 minutes left. With that said, I’ll turn it back over to James, our moderator and hopefully have a chance to answer a few questions that came in during the presentation.
James Dorn: Yeah, Thanks, Jay. Great job in going over that information. It’s nice to kind of view it at a glance here and at a high level and get some explanation behind each one of those areas, a lot to unpack here. Let’s switch over to some of the questions. We’re getting quite a few here.
J Schneider: Sure, okay.
James Dorn: We’ll tackle some of the bigger ones and then some of the other ones, we’ll tackle maybe offline here and send it out to everybody.
J Schneider: Yeah, we only have a few minutes. We’ll try to get to as many as we can.
James Dorn: The first one, Jay, is on virtual engagement. We have an attendee who’s asking how large of a shift are we seeing in the responsibilities from, what I would categorize as, let’s see, from a field sales team to inside sales or other teams internally.
J Schneider: Yeah, great question.
James Dorn: How large of a shift in responsibility are we seeing here?
J Schneider: Well, over the last year, it has been pretty significant as you can imagine. Lacking the ability to get out in the field and into the marketplace has really kind of forced companies to kind of revisit and look at how they engage and work with those customers. That shift has been pretty sizable where the burden of revenue generation and sales, customer engagement, virtual engagement has really kind of shifted toward that inside sales team and their ability to reach those customers virtually and bring those sales into the organization. We’ve seen quite sizable shift there with our customer-base and certainly with the companies that we speak to on a weekly basis.
James Dorn: Yeah, I would agree. Even just titles, at this point, almost don’t matter, right?
J Schneider: Yeah.
James Dorn: I mean, it’s a matter of who understands the product and the applications really well? Who can communicate that to customers in a different medium? It may not be person to person but it’s through just digital communication, if you will.
J Schneider: I think the companies that are in position there do pretty well. On a side note, it’s kind of funny where there’s some companies that we’ve run across over the last year and they didn’t really have an inside sales team. They quickly had to adapt and change that. To your point, James, about titles and just it’s how do we get that problem solved? Even though we don’t have that infrastructure today, it was quickly developed and it would need some changing and updated modernization as they go through the next 12 to 18 months but it was certainly a pretty strong eye opener for many companies and understanding how they were going to solve that problem if they didn’t even have a structure internally to do it.
James Dorn: Yeah, and I think that’s a great segue to the next question about culture and the idea of change management. This attendee is asking, how do you really get buy-in from the workforce for taking on new responsibilities based on all the other market changes and customer dynamic changes?
J Schneider: That’s a great question. We get that one a lot. In the presentation, we talked about this today, right? Companies don’t change, people do. Change is hard for individuals, particularly roles and responsibilities change. How do we go about doing that?
Well, one, is do they understand the vision? Do they understand the path? Do they understand what the path is or the operating model a company is? More often than not, we find that they don’t necessarily understand it. It’s not necessarily a question of buy-in but it’s really a question of, do they understand how the company is going to achieve this goal or overcome these objections or these challenges in the market. When there isn’t a clear path or isn’t done in a cross functional collaborative way, it tends to make change management and that cultural change very, very difficult. If you’re consistently standing on the outside looking in and trying to understand and decipher what the business strategy is, it’s probably not a good place.
We did talk about that in the presentation today about over communicating, I can’t stress that enough, change management or cultural change is really around over communicating, bringing everyone in the organization regardless of what their functional job is and understanding how that plays a role in that new world or the new operating model.
An example may be that often you’ll have change management or vision strategies with everything from your marketing teams, your product team to sales and maybe even leadership. Often, companies will maybe skip their operations, the factory workers, the forklift drivers but if your operating model is to improve customer satisfaction and you have a 13% return rate because products are damaged during shipping, I would suggest you probably should get everyone in your company including the guy or girl who drives a forklift, to understand the goals and vision of the organization, so they can participate in that change. Maybe, instead of 13%, returns, it’s zero returns or a very, very small number, right? They’re packaging better. They’re taking better care of the product before it goes out the door as an example.
The other point I wanted to make there, James, is success or failures of your operating model is as much to do about the structure and way that you’ve developed that model as it is to do with how the organization’s ability to change and adapt to that model. It’s not necessarily going to be because the plan was poorly written or that the ideas did not flow or that someone didn’t execute a particular line item on the plan, it will more often than not be because individuals had a hard time understanding and adapting to that change, for lack of a better way of saying it. Hopefully, that answers the participant’s question.
James Dorn: Yeah, I think with the way this was worded, I think it’s definitely answers the question here, Jay. Okay, next question, Jay, we’re shifting over back to revenue growth with the growth task force.
J Schneider: Sure.
James Dorn: This attendee is asking, what is the concept behind the orchestrator role? How many programs do you generally see in market at one time?
J Schneider: The orchestrator role, referring back to that image on there is really an individual that can take ownership of that group that can drive that organizational, that task force within the organization, have responsibility and accountability for it moving and advancing the ideas and innovation around capturing new growth opportunities. It could be a individual, one or two individuals, but really, that person is think of them as a program manager, really focused specifically on making sure that that task force in that group can grow and do the work and focus that they need to do as an organization and not necessarily continues to be distracted in other areas of the business in a continuous basis. What was the second part of that question, James? I want to make sure I have that.
James Dorn: It’s on the idea of having agile programs in the market. They’re wondering how many programs do you generally see at a given point in time that are active in market?
J Schneider: Yeah. Typically, you may see, you may start out with one or two. As you become more proficient in this area, typically, we would see maybe three to four of those at any one given time. Rarely do I see more than five or so and the reason being is because they tend to get diluted, they tend to lose their focus. At this point, if this is new and this is something that you’re looking at deploying, keep it simple, one or two, it’s going to be good. Start there, focus on those and expand as your capabilities expand as a company and your competency increases and your skill level increases with the group.
James Dorn: Yeah, and I guess we’d have to qualify that, Jay. I usually see that just within the new customer acquisition growth…
J Schneider: Correct.
James Dorn: … but beyond that, you’ll have customer retention levers to where you can have the same amount of programs going on with existing customers and whatnot.
J Schneider: Yes, yes. That can be specific to each competency or particular competencies as an example.
James Dorn: Okay.
James Dorn: I think we have time for one more question here, Jay. It’s on the topic of customer retention.
James Dorn: This attendee, it looks like they sell through distribution. They’re having a hard time identifying who their end users are and asking, what are some ways to actually start to learn more about who our end users are?
J Schneider: Well, it’s interesting question there. I could probably talk hours and hours on that, but unfortunately, I just have about a minute or so.
James Dorn: Thirty seconds.
J Schneider: A couple things… one, work with your distributors. See if you can get a list of who they are to some extent, even work in conjunction with them about who these customers are, create profiles. If you have product registration, use a registration database. If you shift direct to end users or direct to customers, use that data, use that information. Information through your CRM, through prospects or through salesforce.com as an example, will give you great insights but if the data is if the customer is kind of hidden behind your distributor, you can find alternate ways of reaching them either through Dropship, warranty card registration information with your distributor as a partner and understanding that information about who they are, where they’re located, what they bought, as well as through your CRM and the prospecting list at the top of the funnel that you may have created through your traditional or your inside sales team. Those would be probably the four or five best recommendations I have in how to reach or understand that customer-base to be able to target them better whether you sell through distribution or direct.
James Dorn: Okay, great. Excellent. Well, we’re out of time today everyone, for this session. Once again, Jay and I will go ahead and answer these questions that are still in the queue here. Then, we’ll send a recording of this webinar that will include everything you’ve seen thus far and even those answers to the questions. Yes, if you’ve had a great time today and learned a lot of information, please feel free to send us some feedback. Otherwise, we will go ahead and send this recording out to everybody. Thank you everyone for all your time. We appreciate you spending here with us today.
J Schneider: Thank you and have a great afternoon.