Ralph is a co-author of the book Topple: The End of the Firm-Based Strategy and Rise of New Models for Explosive Growth.
He refers to himself as a moth to a flame when it comes to addressing hard problems.
Running in place
Ralph points to the Red Queen in Alice in Wonderland as a perfect analogy for businesses all over the world. Though they run faster and faster, they stay in the same place.
People get seduced by shiny new objects such as AI, digital capability, and other buzzwords and they get caught up in a race. They are chasing the same objects everyone else is, but what will truly be different in a few years as a result of these things?
In many cases, companies simply burn up resources chasing after them, but they stay in the very same place.
Instead, he focuses on the new models and growth engines around the world and how people can take advantage of them.
Don’t run the Red Queen’s race, and don’t force your clients to run it either.
Instead, differentiate yourself and tell a good story. Understand real problems.
Working with an entrepreneur in Kenya on an extremely challenging problem, Ralph discovered that new growth engines have emerged but people are still doing business the same way.
He worked to put his arms and legs around the patterns and commonalities that emerged, and he discovered four lessons of explosive growth.
He and the entrepreneur in Kenya worked together to figure out what capabilities they needed in order to solve their problem in a new way.
New 20 percent
For every organization, about 20 percent of capabilities drive 70 percent of value. But the 20 percent changes. What is the new 20 percent you need to be relevant tomorrow?
If you believe that we live in a fundamentally changing competitive environment, then it makes sense that the capabilities you need to take advantage of that environment are different.
To solve the problem in Kenya, the pair orchestrated a new 20 percent that solved the problems they were facing, and by the end of six months, they were producing in one day what they had previously produced in a week.
When Detroit’s automakers announced two years ago that they were no longer car companies but were mobility companies, that was a reflection of a new 20 percent of capabilities that will drive value in the future.
Immediately, investments and partnerships between tech companies, data companies, analytic companies, and car companies emerged. Industry walls are coming down.
As a salesperson, refuse to run the Red Queen’s race. In a changed world, there’s are new strategic questions.
- Where is the value being created and destroyed in the ecosystem in which my customers are engaged?
- What is the new 20 percent of capabilities necessary to capture that new value?
Every existing organization by definition has been successful. It’s the reason they are in business today.
They’ve gotten where they are today by organizing what they do. They built products and methods and they get paid for it.
The problem is that the world shifts and making that shift is hard. Companies don’t always recognize the new capabilities that they need.
New competitors emerge with new capabilities and shrinking margins should clue us into the change.
Value captured is value seen. If you can’t see it, there’s no way you’ll be able to capture it.
If you’re optimized for a world that no longer exists, that doesn’t work in a world of explosive growth companies. It isn’t enough to try to do more, better, faster, cheaper with what you’ve currently got.
Of course, customer experience is critical, but the way we’re thinking of it is inside out. Customers don’t care about our products themselves. They care about what our products allow them to do.
Customers don’t care about your credit card, but rather about what your credit card allows them to do. They buy a cup of coffee because of how it makes them feel and what it does for them.
Polishing up your products and services misses the fundamental point of what customers want to do and where they spend their time, energy, and resources.
All explosive growth rests on tackling friction in our customers’ lives. What are the friction points in the way our customers live their lives?
What are the new 20 percent capabilities I can develop to address those friction points?
If you believe that your competitive landscape has changed, that requires a new strategic question. You compete in a world of ecosystems rather than industries. Find a new 20 percent capabilities to solve your customers’ friction and begin to grow explosively.
“Grow Explosively” episode resources
Reach out to Ralph at www.topplebook.com where you can find out more about his book or connect with him.
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