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Nov

2011

Turn around and face the market

"Paying attention to customers seems like such a fundamental thing. So why do so many companies do it so poorly? How do companies lose touch with their customers, and lose their grip on the realities of the marketplace?"

www.dachisgroup.com/...urn-around-and-face-the-market

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customer growth opportunities strategy competition rigidity culture casestudies IBM Apple Sony Starbuck GE Kodak xerox customercentricity

Without question, customers are the single biggest factor in any company’s long-term growth and profitability. And yet, as companies grow, distractions multiply. Success can create such a dazzling array of opportunities that companies try to capitalize on too many of them, over-expanding and diluting their offering
Caught up in whirlwind growth, some companies become distracted by a landscape of opportunity and try to do everything just because they can.
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- “Obsessed with growth, we took our eye off operations and became distracted from the core of our business” says Howard Schultz, Starbucks CEO, in Onward: How Starbucks Fought for Its Life without Losing Its Soul.
- While trying to do too many things can be a problem, a focus that’s too narrow can be equally problematic.
- “They just could not seem to see that they were in the information business… Xerox had been infested by a bunch of spreadsheet experts who thought you could decide every product based on metrics. Unfortunately, creativity wasn’t on a metric.”
- But history has shown over and over that you can’t protect your customers from new, disruptive innovations, and if you’re not willing to cannibalize your business then someone else will.
- When a company is large and successful, its size can be its worst enemy, especially when it is so dominant that it lacks serious competition. A company culture that drove success in the early days can become overly codified, rigid and ritualistic over time.
- Name a company you love, a company you are loyal to, a company you buy things from all the time, and you will inevitably find a company that’s connected to its customers; that knows who they are and what they care about.
- But some things won’t change. Customers will always want great experiences, great service, convenience, selection, low prices and fast delivery.
- When in doubt, don’t look inside your company for answers. Turn around and face the market. Get back in touch with your customers.
- Why? In some cases they don’t understand how social networks will impact the business. They can’t see a clear path or understand the implications. In most companies, however, there are a few people who do understand. But bureaucracy, corporate culture, blind spots, fear and risk-avoidant behaviors stand in their way.