“The Strategic Piece” series looks at the hidden issues and topics that can challenge a business, add value, or point to a leading indicator that’s a story about a new customer behavior, trend, or market shift that’s developing and could impact the way we do business in the future.
In Part 3 of “The Strategic Piece” on leading indicators, also known as stories that haven’t been validated as facts, could dramatically shift elements of your business, and change assumptions you’re taking for granted about your business. We’ll share how you can embed stories into your business. Read Part I and Part 2.
How many times have you hopped on your bike, approached a mountain, and ridden up the mountain? The climb is difficult and requires you to dig deep to get to the top. Once you’re at the top of the mountain the view is beautiful. Then you start your descent downward. It can be exhilarating and scary all at once as the speed picks up and you get to the bottom. Did you stay on your bike? What did you see? Can you climb the next mountain?
So many CEOs and their executive team are focused on the day-to-day aspects of the company. As companies grow, their product and companies go through a lifecycle that moves from development, growth, cash cow, to decline. It can significantly impact the company’s revenues.
When companies aren’t focused on what’s next and the stories that can impact the company’s future sustainability, they miss the opportunity to proactively control their future. According to BCG, companies need to transform their business every five years because markets, customers, and competitors change.
The 5 Year Itch
Capturing and engaging with stories is something Intuit does regularly – every five years because change is constant. As the dominant player in the industry for small businesses, 95% of their revenue comes from the US. Therefore, their company sustainability depends on being willing to cannibalizing their current products to create their future.
When looking at their QuickBooks and tax preparation solutions, they’re looking at the stories that could impact their business. In 2012, the stories of concern were cloud-computing, social media platforms, and mobile. Five years later the stories that mattered were AI, access to capital, and analytics. This strategy has worked well for them as they’ve grown their revenue from $3.8B in 2012 to $6.8B in 2019.
Intuit is upping the ante and putting out their perspective on 2020 stories. Their focus is on sustainability, health and wellness spending, and employees and managers that work remotely.
You too can embrace stories and begin to develop a strategy for making sense of the stories.
- Commit to regularly looking at stories as one of the top three priorities for your leadership team. When customers and markets change and disruptors enter, it’s a surprise no one wants to repeat. Committing to make the future of your business a priority on your agenda and establishing a process for reviewing it is key. Just as we make time to talk about the lagging indicators of ROI and EBITA, current indicators such as cash flow, we need to put aside time in these meetings to discuss the stories and to figure out which are insight stories. Build a team of people who will lead the insight stories discussions.
- Create a small team to focus on insight stories. As the CEO, we’re the top person responsible for leading this effort to look at the future of our business – with our team. The small team should consist of your Chief Sales Officer (CSO), Chief Marketing Officer (CMO), Chief Technology Officer (CIO), and Chief Financial Officer (CFO).
What you’re looking to track are the stories customers, partners, and people outside your industry are telling? These stories could be what they’re worried about. What do people who are not your customers caring about? It could be about how the next generation of consumers is engaging or not engaging with your solutions. How are customers, partners, and disruptors thinking differently about technology? How are they monetizing the technology or what that new story is about? It could be about what your customer’s customer cares about. Track them. For companies, it’s an opportunity to consistently look at your customers to understand how they’re changing so you can remain engaged with them, similar to what Hallmark Channel experienced with their Christmas season advertising relationship with Zola.
- Get out of your office and talk to people. Now that you’ve got these stories, get out of your comfort zone, and go out and understand what your customers, partners, and people outside your industry think about these stories. Talk to people who are already down the path you want to go down.
How are they responding to these stories? Why? Who’s doing something new and innovative? Why? As you talk to people who are and aren’t your customers, what new stories are they telling you? What’s the impact and the result? As you go through this process, your eyes may begin to soften enough to see potential new ideas. Are there new ways to rethink what you’re doing? Track this.
- Build an insight stories agenda. In the regularly scheduled meetings with your executive team, focus on a specific topic such as people who aren’t your customers or changing behaviors of existing customers. Have your CMO or the person on the insight stories team responsible for that topic lead the discussion.
During that discussion, look at why this issue is important to your business. What’s the short, mid, and long-term impact on the business. How is the customer changing? How is the market changing? What is the impact of technology in this space? Are there process changes that are giving the competition an advantage? How is this issue showing up in your business? Who are the disruptors? How are they changing the game?
Along with the stories, share quotes, or tapped portions of interviews with customers, partners, and customer’s customers, and people outside your industry to illustrate the challenges and opportunities associated with the indicator.
As you continue to monitor the stories, look for available statics or secondary data that’s available. This may require you to broaden your data sources because the information may come from sources outside your traditional sources. If the research isn’t available, you may have to conduct the research yourself.
- Develop an Advisory Board. As you go through this process, you may identify areas that aren’t
your strength. For example, if your CIO isn’t current on Artificial Intelligence (AI), is there a community you could tap into and build a relationship with a peer CIO that’s leveraging AI in their business? Building an informal advisory board for topics or areas you would like to explore can help you unlock additional insights.
Stories are our window into the future. If you want to ride your bike up and down the mountains with a roadmap to success, make it a priority to invest the time of you and your team to identify and understand insight stories. Your company’s financial future stability depends on it.