Grow Your Business
Many business leaders claim to have competitive advantage and yet they struggle to achieve the growth that they think is possible. What strategies separate winning organizations from the rest? What is required to implement strategy and execute with excellence? In his book Outsizing: Strategies To Grow Your Business, Profits, And Potential, Steve Coughran tackles these questions. I had the opportunity to speak with Steve about some of his insights and tips to outsize your strategy, profits, and potential.
Elevate Your Results
What is outsizing?
Over the course of my career, I have seen the business world transform and certain powerhouses, think Amazon, Apple, and Uber, redefine the business model to capture incredible value. I wanted a term to encompass the strategies that push the boundaries of what was previously thought possible.
The word “outsizing” is traditionally used as an adjective to describe something big or exaggerated in size or degree. As applied to business, the term captures the essence of these household names that grew from nothing into megabrands by a fierce dedication to learning, growth, and significance. Outsizing refers to strategies that elevate results from standard to exceptional.
Over the last decade, I have studied organizations of all sizes in all industries to understand and boil down the mindset, patterns, and processes that lead to remarkable performance. My research led me to develop the six-step process that allows companies to outsize:
(Copyright Steve Coughran, Used by Permission)
3 Pitfalls that Trap Companies
What are a few of the common mistakes you see in formulating strategy?
I see three common pitfalls trap companies when they’re building and executing their strategies.
The granddaddy of mistakes is disregarding the customer. Failing to focus on the customer often results in companies selling a product or service that their customers don’t need. Take Coca-Cola’s 1980s attempt to combat its largest competitor, Pepsi, with its revamped formula called “New Coke” that tasted more like Pepsi. Why would customers want a copycat of something they already had? As to be expected, “New Coke” was a total flop. In other cases, a company might build an in-demand product or service but struggle to execute to customer expectations. Poor customer service is a killer of customer loyalty. If the overall experience doesn’t please and excite the customer, a company is hard-pressed to outsize its strategy.
The second fault I see companies make is ignoring the numbers. I have sat through many strategy meetings listening to bright leaders dream up bold plans without vetting their financial feasibility. Don’t get me wrong – I am all for ambition. However, I constantly warn against blind ambition. Plans must be data-based. Numbers tell a solid story, indicating why, how, and where companies should act. Unfortunately, many employees are ill-equipped or uninterested in reading this story. It’s critical to understand how your strategy will go beyond creating value for the customer and enable you to capture financial value for the business. Running out of cash is the primary cause of company failure. However, these risks can be mitigated by analyzing investment costs on the front-end and consistently monitoring cash flow throughout implementation.
Finally, companies treat strategy too lackadaisically. I can’t tell you how many CEOs seek help with their strategies once they find their company looming just above rock bottom. Too many people see strategy as a solution to their challenges when they have run out of ideas to throw at the wall. Other companies turn strategy into a big annual leadership retreat. They discuss their goals, set objectives, and assign responsibility. However, they fail to follow-up. After the big meeting, they leave a year-long gap for the strategy to crumble.
Building a robust, efficacious strategy isn’t easy to do, therefore it requires organizations to ingrain it as a habit. Outsizing a strategy requires time, patience, and practice. I encourage companies to use a framework called the IARs (Initiatives – Actions – Results) to monitor and drive success. The key is to form a repeatable, systematic approach to strategy that builds structure and accountability while enabling agility.
What are some ways to power customer centricity?
I always tell my clients that they must obsess over their customers. This means that every business activity and investment should be weighed against the amount of value it drives for the ideal customer. Before evaluating the amount of value a company can drive for a customer, however, the company must deeply understand what the customer values.
While a lot of strategists emphasize the customers’ needs, I see values as a multidimensional system comprised of needs, passions, circumstances, and motivations. How can you fulfill your buyers’ essential requirements? What intense emotions, either positive or negative, shape their buying decisions? What everyday situations influence their buying behavior? What propels them to spend their money with you instead of with a competitor?
A company’s deep understanding of customer values manifests into an overarching excellent experience. For example, I value companies that value my time. I was recently having issues with a Garmin watch that I purchased on Amazon. I contacted Garmin directly, and within days, I was able to exchange my dysfunctional watch for a brand new one. The hassle-free experience separated Garmin in my eyes from its competitors. Where many companies would require receipt of purchase, apply strict timeframes for exchange, or force me through a daunting return process, Garmin has cemented its brand in knowing and trusting its customer.
Convert Advantages to Value
How do you identify advantages and convert them into value?
Business school often teaches us to conduct SWOT analyses and determine how we can capitalize on our strengths and build on our weaknesses. While this approach can be beneficial, it’s myopic.
What does an advantage mean if it doesn’t add value to the customer experience? I feel all my responses circling back to this same place – the customer. When companies are trying to identify advantages, I encourage them to solicit input from the group who will directly benefit from the advantages. Ask questions and dig deep: What would encourage you to recommend our company to your friends and family? Why do you buy our product over a competitor’s? Drawing out themes in customer responses will help you understand what your customers care about so you can build advantages that matter.
By delivering an exceptional customer experience, you capture value. Word of mouth from satisfied customers spreads quickly, allowing you to scale your business. Customers are willing to pay more for your products or services, helping you command a price premium. And over time, you develop efficiencies from focusing on the essential, enabling you to lower your cost structure.
What advice do you have for new leaders as they assess and formulate a strategy?
Think big, start small, and act quickly. Successful strategists dream then plan, measure progress, and adjust.
What suggestions do you have for leaders who want to connect with their employees in a more meaningful way?
My biggest piece of advice is be vulnerable. Be open and willing to admit you’re human. In many corporate workshops, I will lead a “Take a Stand” exercise where small groups of employees from all levels and functions of the organization gather in a circle and one-by-one, share a few personal insights. The prompts encourage them to describe where their names came from, when they last shed a tear, or something they’re trying to work on in their lives. I have watched the guards melt away from proud, reserved leaders as they admit their fears and struggles. The empathy resulting from this exercise fuels cultural transparency and connection.
What are some of the main struggles teams face during an outsizing challenge?
As I mentioned previously, building and executing an outsized strategy takes time, discipline, and dedication. Perhaps the biggest team struggle arises when a team lacks commitment. Even one naysayer can poison the opinions of ten people. Therefore, it’s critical that teams are intentionally designed with those who drive success and engagement.
Speaking of team dynamic, it’s important to ensure that you have the right size team. The optimum team size is between five and ten people. I often heed Jeff Bezo’s rule to “never have a meeting where two pizzas can’t feed the entire team.” Too large of teams decelerate decision-making and productivity. Too small of teams can result in group-think.
Though a well-designed team may still face struggles, by selecting the right people and the right size of team, you lay the foundation for success.
For more information, see Outsizing: Strategies To Grow Your Business, Profits, And Potential.
