Next Step’s consultants are experts at taking companies to the next step of growth. We frequently publish white papers, articles and other documents, which we like to share here with our clients, partners and business community.
Welcome to the global economy, characterized by rapid, disruptive change and accelerating adoption of new technologies. Are you and your organization positioned to remain competitive in the face of these fundamental transformations? And are you well-prepared with a strategy to proactively address tomorrow’s challenges?
In 2015, IDC predicted that 30% of the top companies in any industry would be overtaken by a ‘new competitor’ by 2017 – due to digitalization. Today the growth of new business models (as a service, value networks such as Uber), technologies and global consumer demand have driven massive changes across all businesses – having an even greater impact than IDC envisioned.
How to Get Started Now
In 2015, IDC predicted that within three years the top 30% of companies in all industries would be seriously challenged by an innovative competitor. Today, only two years later, this seems conservative as Tesla, Uber, and others overtake the automotive industry, Amazon dominates retail globally and born-digital startups penetrate all traditional markets.
For business leaders, the question is no longer whether to implement a digital strategy but when and how to do so. With the rapid pace change, the best time is while traditional business continues to be strong and can support investment in small alternative offerings or business models.
For example, in the early 2000’s, Netflix invested 15% of returns from their highly profitable DVD delivery business into pilots of video streaming service. Two years later, when Apple and Amazon entered the Video on Demand market, Netflix was prepared to retain and even increase the loyalty and satisfaction of their customer base through DVD or streaming options.
Keys to success when starting a digitalization initiative are:
- Leadership recognition and commitment to change, evolve and expand into digital future
- Understanding of customer needs today and in the future through workshops, focus groups and data analysis
- Clear definition of initial target market for new digital offerings
- Dedicated (autonomous) team focused on design, prototype, and product development as well as user adoption
- Customer experience, feedback and loyalty in initial then future target market segments.
Start Small to Dominate
While digitalization gives access to a broad range of customers, the most effective approach is to start with a well-defined pilot project that addresses the specific needs of a small ‘homogeneous’ target audience. This increases the success of customer adoption and minimizes the challenge of managing global customer expectations and priorities.
In 2006, when Adobe’s Creative Suites was the standard for creative agencies and marketing departments, the ‘as a service’ model was tested with some small business/home office users, who previously could not afford expensive perpetual licenses. By selecting this unaddressed market, Adobe was able to freely test options, gain feedback and delight a new set of customers – without impact on their traditional customer base.
Benefits of Focus on Underserved Market
For many business leaders the greatest obstacle to digitalization is their concern that by offering new digital options, they will disrupt their current revenues. By defining, understanding and then addressing the needs of an underserved market, companies are able to:
- Enhance not cannibalize their market position.
- Experiment freely allowing for possible failure – without damage to market image or expectations
- Generate incremental market share and revenue from a new market segment
While the market definition can be by company size, type of location as in the case of Adobe, leaders of B2C organizations might look to a particular population demographics (age, profession, education level or location) for digital dominance.
In 2010, DNB, Norway’s largest financial institution, recognized that the younger generation (age 18-30) were not interested in the bank’s traditional banking, lending, corporate and real estate investment services.
In focus groups and interviews, millennials confirmed they were most interested in easy ways to manage their money including options to ‘pay on the go’ from their mobile phone. To address this need in Oslo market, DnB established an internal autonomous team to design, develop, pilot and gain customer feedback from a mobile/peer to peer payment service called ViPPs. Two years, later ViPPs is now the leader in mobile payment – used not only by young consumers but a large percentage of the Norwegian population for retail, online, peer to peer or business banking transactions.
Digitalization: Now or Later
Across all industries today, customers demand and have access to a range of digital services. To maximize continued successful growth, business leaders should:
- Commit to exploration and development of new services and business models
- Understand customer needs and future directions
- Identify undeserved market segments in which new digital offerings can be explored
- Build the team to design, develop, pilot and gain feedback on digital solutions
- Continually enhance customer experience, adoption, and value
Timing is everything – by investing today’s returns in development of new digital offerings and revenue streams, your company can maximize tomorrow’s results in current and new markets.
“Those who don’t change will become extinct”. In 2015, IDC predicted that 30% of the top companies in any industry would be overtaken by a new competitor by 2017. Reality shows this was a conservative view.
With rapid time to market for new offerings, global competition and rising customer expectations, successful ‘digitalization’ is critical for survival of all business. Simply put, digitalization is a process through which a company commits to leveraging technology to enhance or expand product and service offerings to most effectively address customer needs. This is often through a ‘pay as you go’ or other customer loyalty based revenue model, providing the company with instant access to customer behavior, usage and needs information (through analytics and artificial intelligence).
Successful Business Transformation to the Cloud
Companies in virtually every industry can deliver unprecedented value to their customers through new technologies. By embracing the power and ubiquity of digitalization, organizations can transform from product vendors to service providers with strong customer loyalty, sustainable and recurring revenue and ultimately higher valuations. Through analysis of customer behavior and information, services can be refined immediately to deliver continually improving customer experience.
Through adaptation of business practices, implementation of ‘as a service’ revenue streams and leverage of technology for operational efficiency, companies can now increase customer loyalty, realize predictable revenue streams, and gain competitive advantage.
Analyst predictions and current growth of technology-based service businesses demonstrate the fast pace of change and disruption of ‘business as usual’ across all markets.
Through prevalence of mobility, cloud and global access, employees, customers and partners now have the ability to shop, work, collaborate anywhere, anytime, on any device.
For a business owner, this means you can now provide innovative services in less time to more people at a lower cost. This facilitates growth and competitive advantage while streamlining infrastructure and introducing new revenue streams.
The ability to work anywhere on any device has revolutionized all aspects of work. Employees, partners and customers expect instant access to tools and real-time data on their personal devices anywhere in the world at any time. This is only possible through cloud computing technology. Cloud technology enables organizations to provide innovative services in less time to more people at a lower cost. This facilitates growth and competitive advantage while streamlining infrastructure and introducing new revenue streams.
It’s no longer a matter of whether to transform a business model to the cloud, it’s about when and how. (more…)
Digitalization, the use of technology to streamline work processes, access information and improve global productivity can be considered the ‘next big paradigm shift’, impacting the way we all work, live and relate to one another. As with all change, this brings both benefits and challenges.
Based on recent Gallup polls have indicated that less than 15% of workers today feel truly engaged and happy in their jobs, change is needed. Often low employee satisfaction is to lack of challenge and opportunity, not feeling valued but trapped in traditional hierarchies and management structures.
How to Safely Navigate Legal Obstacles and Reach Your Goal of Flexibility and Scalability
Workers and businesses alike favor flexibility and independence. Work only when you want and how much you want; work hard and play hard. Businesses want to hire based on immediate need with coverage around the clock – scalability is key. The rise of the new worker model is hampered by dated laws that fail to recognize and adopt to the new model. Learn from the panelists how to achieve scalability and flexibility in the U.S. and abroad; when to hire independent contractors vs. employees; when, how to safely classify a worker as exempt; discuss recent industry examples and trends. (more…)
The business world abounds with terms so heavily used they now border on meaninglessness. Before, during and after the recent boom and bust of Internet-based and other high-tech companies, questions about the attractiveness of a company’s “value proposition” and the potency of its “business model” dominated the discussion of perceived winners and losers. Yet what was called a value proposition or business model during the recent frenzy – when just about any “me too” product or company could get funded – was nothing more substantive or thoroughly developed than the fanciful dreams of charismatic visionaries. (more…)
The race to the cloud is revolutionizing sales channels for product vendors, and now organizations and their channel partners must adapt to thrive in the changing marketplace.
It is critical to define and execute a forward-thinking channel strategy. This includes determining which of your channel partners will become strategic partners and which will become integration partners. Integration partners provide technologies to complement and enhance your offerings, whereas strategic partners collaborate with you in product development, resource deployment and standard setting.
As many serial entrepreneurs know, revenue and customer attainment is the key to success for all companies. However, reaching and winning new customers is challenging – especially for young companies. Gaining awareness and developing trust with buyers can be costly and fraught with error.
An alternative path is to develop relationships with ‘channel partners’. Simply put, this is a way of reaching end customers through their relationships with trusted companies from which they are already buying other products.
In this day of constant information flowing through every conceivable communication channel it’s more difficult than ever to stand out in a crowd and really get noticed. The five steps below will provide a good start to helping you get in front of your intended audience:
While there are many obstacles to growing a sustainable, successful company, the most impactful mistake often made by executives in organizations of all sizes, industries and locations, is in hiring the right sales leader. The following real world case example (using a fictional name) illustrates the impact of many of the common practices in selecting and managing a new sales leader.
Networkers have a plan and are aware
Define specific goals for your networking activities – where arey ou going with your career and/or business and who do you want or need to build relationships with to achieve your goals? Then research and plan to participate actively in the groups, associations or meetings where you are most likely to meet your desired contacts. Who do you want to meet and build relationships with to facilitate achievement of your goals?
Networkers have a helpful attitude
Work on developing an attitude of contribution, service, possibility and opportunity. Look for ways to be of service and contribute. What can you do to be more helpful.
Try this simple, first step toward increasing sales productivity
During this unusual economic situation, businesses are experiencing increased pressure to generate more productivity from all parts of their business—including the sales area. One piece of advice I give my clients is to think of their entire team as their sales organization. As simple as this seems, making this change can have a significant impact on the company’s productivity.
It is common in business to think of sales as a separate, specialized part of the organization. (more…)
The race to the cloud is revolutionizing sales channels for product vendors, and now organizations and their channel partners must adapt to thrive in the changing marketplace.
It is critical to define and execute a forward-thinking channel strategy. This includes determining which of your channel partners will become strategic partners and which will become integration partners. Integration partners provide technologies to complement and enhance your offerings, whereas strategic partners collaborate with you in product development, resource deployment and standard setting. The following actions will help ensure successful transformation in channel partnerships:
Between 2008 when Apple launched the App Store and today’s milestone of 100 billion downloads (as announced by Tim Cook at the Apple Developers Conference in San Francisco), millions of developers have endeavored to build ‘the killer app’.
For every one that achieved successful acceptance in an app store, customer revenue and/ or exit by acquisition, there are hundreds which failed. What are the real differences –is it a better idea, better access to funding, luck or market execution? In Silicon Valley it is often a combination of those factors. (more…)
Sales success today is dependent upon the sales representative’s ability to align their message, approach and offering to the perceived value of the customer or prospect. Next Step’s “Value Sales” process proactively addresses the ‘so what’ or ‘why should I buy from you’ question in the prospects mind. “Value Sales” begins with researching, understanding and listening to the prospect’s critical business needs.
The following 5 tips touch on the “Value Sales” approach to better align your sales approach.
Next Step, a Silicon Valley based consultancy with a branch in Oslo, recently completed a study of funding patterns and success rates’ for Norwegian companies compared with US companies of a similar size. Twenty Norwegian companies were included across ICT, life science, sustainability and service industries.
Through Next Step’s review of the investment, revenue and profit data from publically available sources, the Norwegian firms, on average, received greater initial funding than similar US firms. However, they showed significantly weaker revenue growth within the first two years than the US comparatives.
A Nordic to U.S. Comparative
Successful global growth of ICT, Medtech, green tech/sustainability and consumer product innovations (as a result of great creative minds, research, academia and public support) can be the future for the Nordic economies (Denmark, Finland, Iceland, Sweden, Norway).
However, sustainable growth requires more than a product idea. It demands skillful commercialization to drive customer adoption and revenue generation. Funding ultimately comes from profitability but during the ‘startup period’, investment is needed to build the solution and acquire initial customers. The source of the funding, process for attainment of customer commitments and time to market is often quite different for Nordic compared to US companies and entrepreneurs. (more…)
While Silicon Valley and Oslo share a strong passion for technological innovation with a growing desire for Norwegian entrepreneurs to achieve the dream of international success, the path to funding success is quite different in Silicon Valley.
First, the good news…with the currently strong economic growth in the valley, there IS capital available and deserving startups and mature (founded 2010-2013) companies are receiving VC, institutional and angel investments. However the key word is ‘deserving’. While there are examples of ‘hot companies’ that receive funding by simply being in the right place at the right time, generally US investors make funding decisions based on a company’s demonstrated market position, customer traction and positive financial results. (more…)
Many U.S. companies who are facing revenue struggles at home are being lured by the bright lights of international expansion, by the drumbeat of globalization and by the vision of vast untapped markets of consumers or business buyers overseas. For many companies and the people who run them, this venture is their first foray into the great unknown. Unfortunately, many will make the same mistakes and suffer the same consequences as those who have gone before. International markets are strewn with the carcasses of global adventurers who have ventured and failed. So what are entrepreneurs to do to seize the lucrative opportunities before them? (more…)
In today’s world many leaders struggle to understand what accountability really means: is it simply holding people responsible for their defined obligations – or is it something more? Your understanding of accountability determines your response when a crisis strikes and a project is at risk. A leadership style and how one responds to problems can help build organizational capacity. While it is crucial to address problems quickly, it is also important to include your team members in the solution. (more…)
Since 2008, Next Step has provided consulting and advisory services to client companies with multi-generational workforces–managers and employees ranging in age from 19 to 92 enabling clients to achieve greater cohesion and productivity across the generations.
All leaders and employees must become familiar with the unique perspectives, needs and motivators of each generation, and be willing adapt their own work styles and actions to achieve maximum productivity.
Practice Good Etiquette
- Reduce long threads of forwards
- Summarize threads for convenience and to improve understanding
- Copy only those to whom the e-mail is relevant
- Clearly identify why the recipient is receiving the e-mail and what you would like them to do.
Today’s workforce is comprised of five distinct generations: Traditionalists (born 1930 to 1942), Baby Boomers (1943 to 1964), Generation X (1965 to 1976), and Millennials (1997 and after). Each of these generations is characterized by unique preferences regarding work style, shifts and schedules, reporting methods, and expectations of management. Lack of understanding, respect and appreciation for the differences and value each generation brings into the workforce can lead to mistrust, breakdowns in communication, misalignment, and loss of company productivity.
According to studies by the Aberdeen Group, the Harvard Business Review, and the Human Capital Institute, successful companies achieve better business results than industry peers, because they invest in training their employees. But there is a training program… and there is a learning program that delivers powerful business results.
Too often, organizations view training as a one-time event rather than a process. Many organizations invest in courses for employees but do not follow up on their performance over the long term. And frequently, training itself may not relate directly to what people do every day on the job. As a result, many companies do not to realize the full return on their investment in training. (more…)
A quick show of hands: Who hates meetings?
So that would be most of you, right? It’s not surprising. Workers across this country are gripped with soul-deadening angst as they shuffle down hallways to attend weekly reviews of “housekeeping issues.” Years of our lives are slipping away in stuffy, overcrowded conference rooms, and nobody seems to be doing anything about it. Meetings can bring down morale and blow holes in the productivity of a workday. Pitifully few constructive ideas come out of them which means, of course, that yet another round of meetings will be called.
If you are like most people, you struggle to find enough time to complete everything on your daily or weekly to-do list. In recent years, the entire working environment seems to have sped up. But someone forgot to add more hours to the day as they added all of the additional responsibilities you have taken on. In today’s streamlined, fast-moving workplace, it’s more important than ever to make the most of every day. And getting control of your time is possible.
Time management is difficult, and it’s a flawed concept: you can’t really manage time. It is finite. What we all know and talk about is, in fact, how we can manage ourselves better. So, if you want to manage your time better, you have no choice but to learn to manage yourself better.
Bringing the best talent to your organization, however, that is not enough. Successful organizations have more than monetary incentives.
According to a recent survey in Silicon Valley, over 50% employees believe they would earn more money by switching jobs. Money alone is not enough. Additional incentives help retain key employees and help employees remain both efficient and productive.
Planning and Candidate Identification
- Identify the need for an additional employee
- Clearly list all deliverables and accountabilities that the ideal employee in the role would fill
- Discuss with ALL responsible parties the timeframe requirements for the hiring process
- Decide collectively on the compensation that will be offered
- Write out the job description matching the role and experience required for the role
- Determine the appropriate marketing channels to promote the open position
- Leverage email or phone screening to rank potential candidates using a spreadsheet or other tool
- Identify the best potential candidates that fit the job requirements
- Invite the best potential candidates to have an introductory phone call
- Filter out the best candidates from the phone conversations based on the job requirements
- Invite the best candidates in for your in-person interviews
Actively engaged employees and teams are the backbone of successful companies. In order to build and maintain a productive workforce, a company needs loyal employees who are fully engaged by their work and role in the company. As the lure of other opportunities increases, retaining excellent employees is increasingly difficult. Below are a few concepts to keep in mind when attempting to improve the productivity of your workforce by clearly communicating your expectations for your employees:
Share information freely with your employees.
Employees need to be educated on the way things work at your organization. They need to be informed on the products, services, policies and procedures they will encounter when working for you.