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Want to grow faster, and smarter? Adopt the New Rules of Fearless Growth

friendship-2366955_1920Growth has always been fundamental to business success, but it’s never been more critical than it is now. Rapid changes in technology, shifting customer expectations, disruptive business models and quickly evolving regulations force organizations to innovate quickly and invest in new lines of business that will fuel future growth. The problem is, the same forces that make growth imperative also can make it incredibly daunting.

I see business leaders wrestling with some tough strategic dilemmas: should we disrupt our own business before someone else does, or focus on protecting it? Do we develop new capabilities internally or partner externally? Do we craft a careful plan or simply plunge right in? If you aren’t careful, these uncertainties and doubts can slow you down, while the competition speeds by.

To be able to respond quickly and intelligently to the fast pace of change, all levels and functions in your businesses need to be creative, responsive and agile. You need to follow the new rules that fearlessly growing companies live by. Here’s a quick summary:

Rule #1: Embrace uncertainty. People are wired to fear uncertainty, but it’s important to capitalize on uncertainties in your market, rather than letting them slow you down. Companies that grow fearlessly know that highly predictable markets often create situations in which all competitors look alike, and margins are thin–thus, market uncertainties can create new opportunities for them to differentiate themselves. These companies are willing to take prudent risks and know how to manage risk. In short, they operate confidently in uncertainty.

Uncertainty creates opportunities to pull ahead of the competition. Having the right risk mentality and moving quickly gives you an advantage over competitors that are slower to respond. In fact, the faster and more surprising the market change, the greater the advantage for companies that can move quickly. Take a cue from the film industry and try placing multiple small bets. Repeat past successes, and keep budgets realistic and proportionate to projects. Proceed even when there are risks, but be proactive and disciplined in managing the risks.

Rule #2: Get in sync with your customers. Your customers are a powerful yet often underutilized source of ideas for new products and services, improved current offerings, and new ways to do business. In fact, they’re often willing to contribute by giving product improvement ideas, technical support for other customers, videos, reviews, referrals, content related to your products, and other marketing value. All of this helps you stay in sync with their changing needs, so you’ll be prepared for whatever the future brings.

Even top executives can stay in sync with customers, by observing and interacting with them. For example, Home Depot executives work in the stores, helping customers and providing advice just as a typical store associate would. Other companies that I work with have set up joint development environments with customers, invited them onto customer advisory panels, or collaborated with, observed and learned from customers in other ways.

Enabling customers to customize the products and services they buy is another great way to learn  about their evolving needs. This gives you the information you need to innovate new products and services, which stimulate growth. And, don’t forget to observe and cater to your “outlier” customers—the ones who use your products and services in unusual ways—to gain insights. They can provide you with a window into emerging market trends and ideas for new products and services.

Rule #3: Partner, borrow and share. In the past, businesses needed to own or take responsibility for every aspect of their value chain, from research to development, to operations, to sales and marketing. Not anymore. Today, businesses that grow fearlessly crowdsource, outsource, and make use of freelancers, bloggers, microbusinesses, individual innovators, and myriad partners to achieve far more than they could on their own.

You don’t need physical assets to grow huge in terms of reach and value. We see examples of this everywhere we look. Alibaba is the most valuable company in Asia, but it has no inventory. Airbnb has a greater market capitalization than Marriot, but owns no hotels or real estate. Uber is the world’s largest car service, but owns no cars.

By outsourcing non-core parts of your business, collaborating with outside partners, and bringing in new ideas from outside your organization, you can grow in ways you would never be able to achieve on your own. And in the process, you can strengthen your own internal people and capabilities.

Rule #4: Connect and strengthen your ecosystem. When you create the right ecosystem for your company, it will take on a life of its own and grow itself.  Look at Airbnb: before they came along, staying in someone’s home was risky business because guests did not know who to trust. But Airbnb solves this problem by creating a platform for guests and hosts to score each other. And many guests enjoy making friends with their hosts, and having access to advice about local haunts, great places to eat, and how to escape the tourist trail.

Once an ecosystem gets going, it becomes self-sustaining and enables fearless growth. Figure out who’s already in your company’s ecosystem, and whom you would ideally like to have there. Then determine what value you would like each member to both give and receive. Consider creating a technology platform to enable richer interactions between ecosystem members, and facilitate and nurture their real-life relationships with each other as well. Building the strength, size, and participation in your ecosystem can fuel growth, enhance customer loyalty, and insulate your company from market upsets.

Rule#5: Open the floodgates of employee creativity. Employees want to be engaged in their work, and want to contribute to something greater than themselves. Too often, however, employers squander their talent by over-measuring, micromanaging, and failing to inspire. They may even punish employees who get too far ahead of company management, instead of rewarding them for their initiative. It’s important to facilitate employees’ natural desire to collaborate with others, and to grow their own skills. By giving employees the freedom, knowledge, and network they need, you will unlock vast power.

There are many steps you can take to get the best from your employees. First, don’t be afraid to say ‘I don’t know.’ Revealing your own ignorance welcomes people at all levels to share their opinions and perspectives.

Continually pose new questions and challenge assumptions by introducing competition or games to stimulate new ways of thinking and free people to take risks. Allow new ways to work by encouraging collaboration and forming project-based groups, rather than top-down structures. Finally, communicate your purpose and values clearly and frequently, so employees know what you expect, even when no one is looking.

Rule #6: Learn fast and fearlessly. Fast learning, coupled with an “experimentation mindset” is the most valuable competitive advantage a company can build. For example, UPS knows that regulations may someday require lower emissions and fuel efficiency, so it has a “rolling Laboratory” of 11 different types of alternative-fuel and advanced technology vehicles in use today. UPS is ahead of regulations in learning how to optimize each vehicle for the various driving conditions; from dense urban driving to remote rural driving.

Keenly observing the business environment, taking action before you feel fully ready, and incorporating what you’ve learned immediately into your strategy are all tickets to play in today’s fast-changing global economy. Make sure you are constantly experimenting, learning from successes and failures, and applying your knowledge. Anticipate the changes in your business environment and set specific learning goals based on those changes.

Rule #7: Build trust into all you do. When employees, business partners, customers, and others in your work community trust each other, they can move faster, and more efficiently. When you trust that your colleagues will do their part, you can set more aggressive goals, place bigger bets, and have a bigger imagination about what may be possible. When there is trust between coworkers, everyone feels comfortable engaging in the debate and disagreement required to make sound decisions. There is more innovation. Trusting your business partners means you can move faster together, navigating uncertain terrain with greater confidence.

To begin building trust, work to neutralize fear in your organization. Help employees feel safe when voicing their ideas and opinions, or when trying new things. Foster and expect creative conflict by encouraging employees to disagree and challenge each other. When you give people challenging but realistic goals, act in a transparent way, show vulnerability, grant people discretion about how they do their work, and show appreciation for work done well, you’ll be amazed how much your team can accomplish.

Pick a few areas and get started now

If you’re starting to get the picture that the old ways of doing business no longer work, you’re exactly right. It’s time to throw out the old rule book and start fresh with approaches that make sense for the new economy.

However, the seven rules above cover a lot of ground, and no company can effectively focus on all seven areas at once. So, choose one or two of these areas where you believe you can have the greatest positive impact over the next few months.  In these one or two areas, set explicit goals for what will be accomplished, when, and by whom.

While you don’t need to plan your entire transformation in detail, you do need to get started immediately. Set very specific and measurable goals for the next six weeks (or an even shorter timeframe!). Go ahead and schedule a call or meeting, six weeks out, at which you will review the results of your short term actions. At that meeting, take stock of what you accomplished, and what you’ve learned. Then, re-focus your efforts, and decide on goals for your next “six-week sprint.”

You might be surprised—making one or two high-impact changes often results in a dramatic cultural shift that can open the floodgates. People like what they see. They jump on the bandwagon, and the movement builds momentum and takes on a life of its own.

What you can expect

Implementing these new rules can feel risky at first. However, once you hit your stride, adhering to these rules reduces your risk by improving your ability to weather market upsets. You’ll have greater insight into customer needs, and will find it easier to spot and capitalize on market trends.

You’ll have more flexible capacity and capability to pursue revenue growth opportunities. You will have more people—partners, employees, customers, and others—to rely on. You’ll be faster at making decisions, and more adaptable in executing your strategies.

When we commit to fearless growth we embrace the inherent risks of business—and of life itself—and immerse ourselves in a new way of working, leading and interacting. That way is far more exhilarating and effective than the so-called “safe” alternative we might have otherwise chosen. Whether we win or lose, fearlessness is its own reward.

A Kiteboarder’s Guide to Embracing Business Uncertainty

Amanda at Tybee Island, Oct. 2017

Amanda at Tybee Island, Oct. 2017

If it’s a weekend and the forecast shows potential for good wind, my husband and I head to the beach. We aren’t always rewarded with enough wind for great kiteboarding, but if there is wind, we’re often the only ones there, set up and ready to take advantage of it.

Meanwhile, others who have waited for the wind to materialize before jumping in the car often arrive just as the wind is dying.

Just like the wind, most everything in business is subject to change, often when you least expect it. And change brings uncertainty, which often manifests as doubt, delay and paralysis. We don’t know what’s going to happen, so we wait.  According to psychologists, we humans are hardwired to dislike uncertainty; it’s in our DNA. In a recent study, researchers discovered that uncertainty is more stressful to humans than knowing that something bad is definitely going to happen.

But what if, instead of being a negative, uncertainty in business was a positive? In my experience, this is often the case. Why? Because uncertainty creates opportunities to pull ahead of the competition and stay ahead. And businesses that are willing to take on more risk and operate in uncertain environments can win a competitive advantage over those that are not. They’re on the beach and ready when the wind picks up.

Uncertainty creates opportunities to pull ahead of the competition and stay ahead. Click To Tweet

Don’t let uncertainty put the brakes on your business’s growth. Here are six ways in which fast and unpredictable changes in your business environment can create opportunities to gain competitive advantage.

1. Marketplace changes create new opportunities for us to surge ahead of competitors. When the world is certain, even mediocre companies can perform adequately. The world plods along much as it always has. Companies serve known customers, providing for well-understood, long-standing needs. The trouble is, in highly certain times, when nothing much is changing, companies tend to become more and more alike. In search of growth, they go after one another’s customers, or drop price to gain market share (predictable winds lead to crowded beaches). Margins get squeezed. It’s okay for everyone, but great for no one.

Uncertain business environments, on the other hand, create the potential for companies to break out of the pack. When something unexpected happens—a new technology, a new competitor, a new customer need, or a change in governmental policy or regulations—it gives alert and prepared companies a chance to speed ahead if they respond in a faster, smarter, and more-adaptive way to make the most of the new situation.

Uncertain business environments create the potential for companies to break out of the pack. Click To Tweet

2. The faster and more surprising the change, the greater the advantage for companies that respond quickly. Company leaders who welcome marketplace changes and think, “How can I exploit this, before my competitors do?” rather than “Let’s hunker down to watch, and hope this goes away,” are able to take fast action, and can make the best of even difficult situations. Managing well in uncertain environments, to minimize risk while taking advantage of changes that occur in the business environment, is an uncommon capability that can be a tremendous source of competitive advantage.

A business unit president I work with was concerned when she noticed that sales in the Midwest region had plummeted in the space of just two months. After a series of conference calls with salespeople in the region, we discovered the reason: A competitor had begun offering same-day delivery and directly targeting all of my client’s best customers. We acted fast, identifying a set of products that my client could reliably deliver in a two-hour timeframe, using company-owned delivery vehicles. The competitor, who was using third-party logistics firms for delivery, couldn’t match this offer, and sales rebounded, surpassing even their former level.

3. We can take simple steps to be more prepared for the unexpected. Anticipating a wide range of possible future scenarios, and having a frank discussion with other leaders in your firm about what you should do to prepare for the possibilities, is essential to preparing for the unexpected. Of course, we can’t predict the future, but through this type of discussion, it often dawns on us that there are a few “no-brainer” steps we can take to be ready for what might happen (such as packing the car with kite gear if there’s over 50% chance of wind). For example, fast-food restaurants that specialize in chicken likely have a plan for how to respond quickly with substitute sources of protein if a fast-spreading virus decimates chicken supplies. And, scenario-planning exercises can help us to become more deliberate in watching for the early warning signals of future market disruption.

4. The more we proactively change the business environment, the greater control we have over business outcomes and competitive advantage. Martial arts experts know that if you want to be faster than someone with fast reactions, you have to create the situation. Consider how you can shape your business environment to pre-empt an effective competitive response.

Consider how you can shape your business environment to pre-empt an effective competitive response. Click To Tweet

One company I know was superb at helping to shape future regulations and industry technical standards—to its own advantage. Another was adept at developing new distribution channels that the competition hadn’t considered, and would have a hard time penetrating quickly. Both companies kept their strategies under wraps during several months of negotiation and preparation with other parties. As a result, other players were caught by surprise, and were slow and relatively ineffective at responding.

5.  We can create new profit streams by reducing the risk and uncertainty for our customers, especially in volatile markets. If your company is good at spotting the opportunities inherent to uncertain business environments, and at managing amidst uncertainty, consider how you can create new sources of growth and profit by reducing the risk of your customers, or even your suppliers. Insurance companies are masters at this, but every company should keep their eyes open for opportunities to do so.

A tire company I know reduced uncertainty for its suppliers by committing to “take or pay” for certain volumes of raw materials each month. In return for this concession, suppliers gave the company lower prices. Even more important, however, was the fact that by reducing supplier risk, the tire company ensured that suppliers would be economically healthy and able to ramp up supplies quickly when the market demanded it. Removing risk for suppliers created a greater ability for the tire company to thrive in an uncertain market.

6. Customer and market data, combined with artificial intelligence, can dramatically increase our ability to make fast decisions amid risk and uncertainty. Artificial intelligence and data are driving innovations across agriculture, automotive, energy, retail, weather, sports, and nearly every other arena. In many cases, these innovations have transformed the customer experience and brought tremendous new efficiency and value (an example is ikitesurf, an app devoted to collecting data from kiteboarders, and helping them to know when the wind, weather and tides will be ideal). These innovations also have the potential to reduce risk while increasing speed.

Kabbage, started in 2009 and now valued at over $1 billion, specializes in making loans of up to $100,000 to small businesses. The small business market is inherently risky—only about half of small businesses survive their first five years. Small businesses that fail often default on their loans in the process. Kabbage spotted this uncertainty and decided to exploit it. The company built a system to allow small businesses to qualify for loans and receive the funds in minutes—if the companies give Kabbage access to online data that provides a window into the health of their business, and their capacity to repay the loan. This includes UPS data on shipments, eBay and Amazon order data, and even social media data. If the loan applicant has a healthy stream of orders coming in, Kabbage is happy to provide a loan. Kabbage solved a big problem in small business lending by reducing risk and uncertainty, and providing small business with extremely fast access to funding.

In summary, people are hardwired to fear uncertainty, but embracing uncertainty is key to growth and innovation.  When you deal with uncertainty in a rational and fact-based way, uncertainty can work for, rather than against, you.  Having the right risk mentality and moving quickly in uncertain business environments can create a lasting advantage over competitors that are slower to respond. So next time you face a market upheaval, consider how a smart, fast response can create new opportunities for your company.

Embracing uncertainty is key to growth and innovation. Click To Tweet

Want to move fast on a strategic opportunity? Deploy a focused team, and get out of their way!

Jetpack manNo doubt about it: we live in a rapidly changing world. Disruptive technologies, shifting customer behaviors and emerging business models are shaking up nearly every industry. If you are going to survive and succeed amidst this change, you need to move in a fast and adaptable way. Yes…even if you’re a huge global organization with many layers of leadership.

To survive and succeed amidst change, move in a fast and adaptable way. Click To Tweet

For seasoned executives, the knowledge that they must compete with young, energetic upstarts who can switch speed and direction on a dime can be scary. And with good reason: It’s often very difficult for established organizations to move quickly and behave in an entrepreneurial fashion.

Here are just a few examples of what may be slowing your company down:

  1. The incentives you use to motivate your leaders may be misaligned with the direction you need to head. Mark, a leader in a financial services firm, found it hard to convince the firm’s sales people to invest their time in growing sales of new products, because their commissions were much higher on existing products. Unfortunately, those existing products were fast becoming obsolete.
  2. Your organizational structure may not match up with new priorities. Laura, business unit president at a software firm, sought to grow recurring revenues and reduce cost, by transitioning customers to software-as-a-service (SaaS) offerings. Her business unit’s progress was very slow, however, because the professional services and customer support organizations were built to serve customers who were buying customized, on-premises solutions, not SaaS.
  3. There may be a gap in your employee’s skills and knowledge, which impedes their success in pursuing new business goals. Jose’s objective was to develop a new product line to serve customers who were expanding their e-commerce capability, yet his employees were ill-prepared to serve this market.

However, none of these harsh realities can become excuses. We must respond quickly, intelligently, and with courage when we face obstacles like these. One of best solutions is to create cross-functional teams and assign them to pursue particular growth opportunities.

When you create a small, focused team, you want to provide access to all the great things your company can provide—things such as customer relationships, company assets, funding, distribution channels, and the like—but you also want to protect them from having to ask permission too often. You need to protect the team from some of the big-company activities and policies that might slow them down.

Granting “special privileges” to these teams can accelerate their learning and progress, and enable fearless growth. Here are some approaches that I have seen work well:

• Faster processes for approving expenditures, and lenience on investment approval hurdles.

• Freedom to focus on “learning objectives” and other non-financial metrics, as opposed to strict financial targets.

• Explicit “permission to fail” on experiments or initiatives.

• Flexibility on legal requirements. For example, instead of having an iron-clad contract with customers, a simple handshake agreement might suffice, so the two companies can quickly try new things, collaborating together to learn.

• Permission to not attend quarterly business reviews, weekly staff meetings, routine training classes, or other events that are not directly aligned with the team’s mission.

• Permission to bypass internal processes that slow down action and learning.

• Access to outside experts.

• Lenient travel budgets.

• Greater latitude to hire (or terminate) team members.

• Different rules for how the team interacts with customers. For example, permission to call on existing accounts without having to ask the account manager’s permission.

• Leeway to use marketing materials that are not fully buttoned up and formalized.

• Time to explore industries, companies, technologies, and ideas that are not directly related to your business (seeing how things are done in a completely different industry does wonders for creative thinking).

Implementing even just a few of these measures will vastly improve your team’s speed and agility. They’ll have more freedom to pursue your strategic goals. They’ll feel motivated and empowered, which means they’ll take faster action, and you’ll improve retention. And, by working with others outside their function, team members gain new skills and perspectives. Innovation will flourish.

By working with others outside their function, team members can gain new skills and perspectives. Click To Tweet

Perhaps most important, they’ll build networks across your company, and with business partners, suppliers and customers outside your company. These networks mean that your team will know who to call—and who collaborate with—down the road, when they encounter a new opportunity or challenge. You’ll be able to pursue your goals more successfully, no matter what the future brings.

Click here for more ideas for how your team generate practical growth ideas, and pursue them quickly and effectively.

Think Like an Explorer

Businessman Walking Outdoors

When I was sixteen, I went on a 2-week horseback trip in the Bighorn mountains of Wyoming. Each morning, we were given the coordinates of the location where we would camp that night, then turned loose with a map and compass. It was satisfying to arrive at the destination each night, after navigating our way through the mountains on our own.

Heading a new strategic direction—entering a new market, innovating a new product line, or changing the way we go to market—can feel like heading out into the wilderness. If we think like an explorer would, however, we can find our way to new sources of profit and growth.

Here are four points to keep in mind when navigating new strategic territory:

Continue Reading →

4 Questions Agile Companies Ask Themselves Every Day

Skier in mountains, prepared piste and sunny day

Do you wish your organization could move faster to take advantage of new opportunities in the market, or to avert emerging threats?

Do you feel that you are missing, or seeing but ignoring, important changes in your business environment?

Does it take longer than it should to make key strategic decisions, or to take action, once those decisions are made?

Today’s most agile organizations have learned how to respond more nimbly to changes in the marketplace. They ask themselves four key questions, every day: Continue Reading →

Six Obstacles That Stop Agility In Its Tracks

Professional sprinter jumping over a hurdle

Are you struggling to make your company more agile?

In my work with organizations in virtually every industry, I find that business agility – the ability to spot and capitalize on new business opportunities as they emerge – is a capability that many companies aspire to, but few achieve.

What makes agility so elusive?

I’ve observed six primary obstacles to achieving agility. Continue Reading →