The objective of Day 2 is to identify growth opportunities beyond the next three years. It’s all about getting you to think about your business in a different way. Rather than simply considering ways to improve what you’re already doing, in a today-forward way, its aim is to encourage you to think more future-back and understand what might be required for your business to win in 5- or 10-years from now.
The first thing to remember is that the future is already here. Technologies are already being developed, customer behaviours are already changing and competitors and other businesses are already adopting the formulae for success.
The ‘trick’, of course, is to spot the future when you see it. Here are five steps that can help you do just that.
- Back to the Future. The first step is a warm-up exercise and involves looking back to look forward. With your team review your business and your market 10 or even 20 years ago. What was different then and what’s stayed the same? Are the products and services the same or different? Do customers buy from you in the same way? Has your competitor set changed? Is your market more or less international than it was a decade or two ago? Answering these and similar questions will help you to identify the big changes and, as you list out these changes, ask yourself what the underlying drivers of these changes have been (technology, social, environmental, political). Once you have identified these drivers, you can then discuss which will continue to be critical to the future of your market and to the success of your business.
- Look outside your market. As well as looking back, you also need to look out. Understanding how other industries, channels and geographical markets have changed will also help you identify new opportunities and possibilities. In the 1990s, for instance, B&Q developed its large-store DIY store format in the UK primarily by adopting the business model of Home Depot, the market leader in the US. But you can also look outside your immediate industry. Chiltern Trains used the budget airline model to create its commuter train operating model, with a focus on simplicity and convenience. As a result, it removed first class carriages and on-train cafes.
- What won’t change? Over the past two decades, Amazon has led a revolution of global retail. Amazon is an innovation-driven business, but its approach to innovation is different to most other companies. Rather than trying to understand and focus on the constant changes in the needs and wants of its various customer groups, the company pinned its innovation activities on the needs that would remain constant. Amazon has centred on three customer needs that Jeff Bezos and his leadership team would remain important to their customers for a decade or more, namely offering more choice, lowering prices and increasing delivery speed. Ask yourself: what are the needs of your customers that will stay consistent over the next decade? And what new opportunities and possibilities exist for your business if you established a laser-focus on those needs?
- Talk to your Early Adopters. Customers find it even harder to predict the future than business leaders! But you may find further ideas and test your thinking by talking to your ‘early adopters’. By this I don’t mean those customers on the ‘bleeding edge’, who will adopt almost any new technology and innovation that comes along. Instead I mean those that are slower than those ‘innovators’ to adopt new ideas, but who are ahead of the majority of your customers and who act as influencers to the bigger group. They are your best window into the near future – maybe not 10 years ahead, but possibly two or three years ahead of your main customer groups. Ask them how they are changing their behaviour when it comes to buying and using your products and services – and those of your competitors. You should also try to understand how their lives are changing more generally, and what that means for what they need and expect from you.
- Brand takeover. Who are the innovative companies that you and your team most admire? Write a list and then randomly pick one or two to answer this question: If the leadership team of these companies were parachuted into your business to run it the way they run their own, what would they do? What would be different in terms of your customer offer, the reach of your business, its organisational style and its ways of working? The list you generate will give you even more ideas about how your business might need to be different in the future.
As with Day 1’s analysis of your current position, you will develop a long list of issues, challenges and opportunities as a result of taking these five steps. Consequently, your final task on Day 2 is to review the long list and agree a shorter set (say 3-6) of critical challenges to focus on as you prepare for Day 3 and start to reset your strategic direction.
© Stuart Cross 2020. All rights reserved.