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Common Sense for the C-Suite

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How to be relevant in an increasingly competitive and complex environment. Thoughts from our corporate strategy team.

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Common Sense for the C-Suite

  1. 1. CORPORATE & STRATEGY VOL. 4 | ISSUE 4 | DECEMBER 2015 COMMON SENSE THE OPPORTUNITY IN 2016: LISTEN, LEARN AND BE BOLD How to Be Relevant in an Increasingly Competitive and Complex Environment FOR THE C-SUITE
  2. 2. COMMON SENSE 2 VOL. 4 | ISSUE 4 | DECEMBER 2015 Once upon a time companies could offer a single high-quality Product or Service and find loyal (paying) customers. Companies dictated the terms of the relationship and communicated to consumers accordingly. The media supported this interaction, serving as both an advertising and public relations medium through which companies could convey benefits, features and pricing to the public. Things have changed. The power to influence purchase decisions has shifted from companies to people. And in doing so, people expect companies to solve their problems and fulfill their needs, while simultaneously advancing and championing their interests. This typically requires companies to forge deeper relationships with their customers to learn about their opinions and to understand their context, preferences, challenges, and opportunities. Doing this well results in people (consciously or not) viewing the company as relevant and valuable because their products and services make their lives better. In fact, companies that make doing business with them the easiest decision a person can make always win. It’s the reason Nike offers and innovates across athletic shoes, apparel, sports equipment, software, merchandising, and digital. Today’s leading brands around the world know people judge them by their thoughtfulness, quality, convenience and innovation. Companies who successfully give back people’s (increasingly limited) discretionary time and make it even more enjoyable, earn their loyalty. These new expectations imposed on businesses by consumers are precisely the reason why companies are scrambling more than ever to Stand Out. The troubling reality is that the very effort many companies are putting into being different is exactly what’s causing them to blend in and sound the same. 1. “We provide technology and services to enable consumers, merchants, and other participants to conduct commerce in our ecosystem. 2. “…reservation app and website that lets you discover and book amazing dining experiences — when and where you want.” 3. “We are innovators in technology, products and services and our company’s core values are reflected in our culture and leadership.” 4. “[We are the] most customer-centric company where people can find and discover virtually anything they want to buy online.” 5. “…one of the world’s leading providers of digital television entertainment services delivering a premium video experience through state-of-the-art technology, unmatched programming, and industry leading customer service.” 6. “…digital concierge service focused on making every part of the dining experience better, for both restaurants and diners.” a. Reserve b. Table8 c. Time Warner d. Direct TV e. Amazon f. Alibaba Answers: 1.f., 2.b., 3.c., 4.e., 5.d., 6.a. Guess Who?
  3. 3. COMMON SENSE 3 VOL. 4 | ISSUE 4 | DECEMBER 2015 Today, business decisions and communications suggest that a company must be some kind of solutions-oriented technology business in order to be given any time of day by customers, investors and business partners. This means offering products that involve sophisticated technology (think: Apple or Intel) or services that are powered by technology (think: Netflix, Amazon, Uber). It also requires talking about a company’s value in terms of consumer lifestyles (think: “At Home” and “On-the-Go”). While not all companies’ efforts feel authentic, it is easy to understand why so many are eager to be characterized as a solutions-oriented technology company. Technology companies evoke a cool kid air, a commitment to the cutting edge and supreme quality. Lifestyle positioning makes the decision to purchase easier for people because it directly connects the applicability and benefit of the product (or service) to a person and his/her life. Plus, a growing emphasis on experience helps people feel special, valued and satisfied by their purchase (increasing their likeliness to buy again – the Holy Grail!). The surplus of energy dedicated to being different has caused companies to be the opposite, to operate, interact and communicate just like all the other cool kids. In 2016, it’s time to shift the focus from being different (which is having an adverse effect) to being needed and desired by current and next- generation customers. There are many perspectives available about how to stay relevant. Let’s focus on the data companies can use to BE relevant: who’s actually relevant today and what might be the ultimate stress-test to evaluating lasting significance? HospitalityTelecommunicationsTransportationApparelCompany
  4. 4. COMMON SENSE 4 VOL. 4 | ISSUE 4 | DECEMBER 2015 The value of knowing your customer is nothing new, nor is it surprising. Customers remain an invaluable resource to influence and inspire product and service development, improvement and creation that will matter and make a difference to them. Because there are more resources than ever to learn about existing and future customers, it is imperative companies focus on what they are looking to learn and the behaviors they are interested in monitoring. This information should include what matters to customers broadly – how they operate day-to-day, their challenges and interests – as well as how customers use a company’s products and services. Key sources often include: social media, call centers, sales CRMs, digital analytics and surveys/NPS scores. Whichever sources are selected, companies should use and overlap more than just one. This will allow them to discover specific, interesting nuggets and trends that they can act on or address. Business performance metrics, such as sales and earnings, and employee data from sources, such as Glassdoor and social media, can help companies understand their strengths and gaps. While some say it’s important for companies to know the business they’re in, with the rate of change today, it can be more helpful for companies to know what they do well. This gives them the flexibility and confidence to apply these core competencies and expertise in new ways (think: Apple). Understanding the zeitgeist and global trends, helps companies remember the context in which they are developing their tools, conveniences and luxuries for people. Discussing what current opinions and perceptions mean for people (and in turn a company’s business) with employees can help companies identify and plan for both core business disruptions and future product applications faster. There are specific sources of information, such as influencer conversation analysis and predictive modeling, which can formally help. Informal observations made and discussed by leaders and the promotion of work/life integration are informal sources that can also offer valuable insight. Companies can’t fake being relevant. Relevance originates from having substance that is validated by people. But there’s good news: with more ways to assess and gage the degree to which people find a company’s products and services valuable, there are also more ways to identify future opportunities for growth. These sources pull from internal and external data. They involve listening and learning. From here, new opportunities to differentiate from competitors and better serve and converse with people are identified. In other words, companies are left with a 360-degree performance review of how valuable they are to people and where they can evolve or earn new business. THREE TYPES OF DATA TO MONITOR AND IMPROVE YOUR BUSINESS RELEVANCE Customer Data Business & Employee Data Industry & Influencer Data
  5. 5. COMMON SENSE 5 VOL. 4 | ISSUE 4 | DECEMBER 2015 Perhaps being needed and desired by people is easier for younger companies, like Hulu and The Honest Company. After all, they should be more in tune with the needs and interests of societies today, as well as the technologies available to power operations, because they come from the same time. However, 90% of startups fail. Demand and flawless execution challenge and affect any business. Nordstrom is a great example of a company with a 100+ year history that is evolving according to people’s tastes, challenges and interests. WHO IS RELEVANT TODAY? Founded in 2008, Hulu is a premium streaming subscription service that specializes in offering current season content from five of the largest U.S. broadcast networks. Not too long ago, it faced fundamental challenges to its business involving the quality of its content and viewer experience. (It seemed unable to compete with YouTube, let alone Netflix.). Faced with increasing pressures from new and existing competition, Hulu turned 2015 into the unofficial Year of the Viewer by acquiring and developing shows and movies people were looking for. They also made enhancements to people’s viewing experience. As a result, the company is experiencing an 85% increase in viewing year-over- year and a 60% increase in consumer signups. How Hulu approaches 2016 will speak to what they’ve learned from viewer data and consumer trends. Time will tell how Hulu redefines TV next. Will it continue to prioritize content acquisition and development? Or, will Hulu move beyond the Content Wars to find new ways to connect viewers to great stories? The Honest Company, a stylish, eco-friendly consumer goods company founded in 2011, came to fruition because of two consumers’ frustration with family and home products. Understanding what ingredients were in the products they used with their families was confusing and the non-toxic options lacked everything they wanted – effectiveness, price and style. As a result, this burgeoning business emerged to create not just the best products, beautifully, but also to deliver them to families at their doorstep (and now through their favorite family retail options). The founders’ deep knowledge of today’s zeitgeist emanates from its products’ Apple-like design detail and its Uber-like convenience. This deep connection to people, the industry and what it does well has led the company to enter six categories with over 90 products and be available both online and in over 700 retail stores across the U.S. Most recently, it has created a new separate entity, Honest Beauty, offering 83 skin-care and makeup products derived from botanicals. Let’s take a look at companies who are focused on understanding how they can provide value to current and next-generation customers.
  6. 6. COMMON SENSE 6 VOL. 4 | ISSUE 4 | DECEMBER 2015 WHO IS RELEVANT TODAY? Recently, its humble acumen has led the company to acquire Trunk Club. Trunk Club was a startup dedicated to making the shopping experience for clothes personal and effortless – bringing individually curated articles of clothing to people at no additional cost to them. It began targeting men who didn’t enjoy shopping but wanted to look good. In 2015 it expanded to women. At its core Trunk Club is about experience—experience dictated by people instead of retail stores. It delivers on the quality of the clothes it ships and goes beyond to give people access to expert advice and service, and ultimately confidence. Trunk Club is one of the latest ways Nordstrom continues to re-evaluate the value it provides people. With that focus, it’s been able to navigate and overcome economic shifts and market changes while still providing exceptional service, selection, quality, and value. During its growth, it hasn’t lost its focus. As a result people have been able to grow with Nordstrom, continuing to be impressed along the way. Being relevant is not as easy as it sounds. Just like 90% of startups, not every established company can keep up. Companies like Victoria’s Secret, McDonald’s and General Mills have opportunities to recalibrate and re-assess their next steps based on what people want, what they do exceptionally well and global trends. Defining what they are chasing first and foremost, followed by using any combination of customer, business, employee, industry and influencer data will help them get there.
  7. 7. COMMON SENSE 7 VOL. 4 | ISSUE 4 | DECEMBER 2015 Assessing your organization’s relevance can be boiled down to answering two core questions: If the answer is yes, you are in a good position. Specifically, does each and every one of your stakeholders answer “yes” (beginning with your employees and spanning you partners, customers and investors)? It’s critical they do. Herein lies the invaluable emotional connection that will drive sales, partnerships and employee retention alike. People inherently want to be a part of something or contribute to something that makes a difference (which can have multiple definitions). It’s the reason brands can develop loyal followings, people choose to volunteer and religion tends to be a collective vs. individual effort. If a company, through its brands, products and services, can offer a sense of community and uniqueness, it is more likely to keep and grow its employees, partners and customers than other businesses. This emotional cue is what relevance ultimately requires. THE ULTIMATE STRESS-TEST: TWO FUNDAMENTAL QUESTIONS 1 2 Does my company (brand, products, and services) make people successful? Does my company (brand, product, services) make people feel that they are a part of something bigger than themselves? Rather than spending 2016 chasing a perceived business ideal, focus on your customer, what you do well and the zeitgeist. Opt for finding, honing and evolving your value to current and new customers. Organize to listen and learn from your customers, employees and influencers. Draw insight from available key sources of data and assimilate these insights into your decision-making. Taking this approach can help you to be relevant as a business in 2016 and maintain this connection beyond. In this unprecedented age of information, democratized through technology, we are left with little reason why not. It’s true people have more power to influence purchasing decisions than ever before, but as a result companies also have more ways to regularly gauge and assess their value to people. Companies who succeed in doing this will be those that listen and converse genuinely. They also will be life-long learners who thrive from adapting and evolving along the way. If there is one thing relevance and business success are not, it’s static. Here’s to a bold 2016! WHAT THIS MEANS FOR 2016
  8. 8. COMMON SENSE 8 VOL. 4 | ISSUE 4 | DECEMBER 2015 WCG’s Corporate and Strategy Group is the organizational communications consulting practice for WCG*, a leading independent, global strategic marketing, digital, and corporate communications firm. The mission of the WCG Corporate Strategy Group is to advise and assist organizations in effectively addressing reputational risk, change management, innovation, product supremacy, and brand leadership. The group offers distinctive expertise in culture transformation, strategy implementation, CEO transitions, leadership positioning, internal branding, M&A post-merger integration, labor-management relations, advocacy and issues management, internal communications improvement programming, investor relations, training and development, and employee worldview research/measurement through a proprietary combination of analytics, management outreach, employee engagement and strategic communications. *WCG is a firm of the W2O Group For more information, please contact Abigail Rethore: arethore@wcgworld.com 646-503-4754

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