by Amanda Setili, author of “Fearless Growth: The New Rules to Stay Competitive, Foster Innovation, and Dominate Your Markets“
Growth has always been fundamental to business success, but it’s never been more critical than it is now. Rapid changes in technology, shifting customer expectations, disruptive business models, and quickly evolving regulations force organizations to innovate quickly and invest in new lines of business that will fuel future growth. Problem is, the same forces that make growth imperative also make it incredibly daunting.
When the rules you used to live by become obsolete overnight, it doesn’t exactly foster calmness and confidence. Leaders have to wrestle with some tough strategic dilemmas: Should we disrupt our own business before someone else does or focus on protecting it? Do we develop new capabilities internally or partner? Do we craft a careful plan or simply plunge right in? And yet, we can’t afford to let fear, uncertainty, and doubt paralyze us.
To be able to respond quickly and intelligently to the fast pace of change, all levels and functions in your businesses must be creative, responsive, and agile. You’re going to feel fear, sure — and yet you must act in spite of it.
In other words, you must practice fearless growth. In my work as a strategy consultant, I’ve found seven rules fearlessly growing companies live by:
Rule #1: Embrace uncertainty.
People are wired to fear uncertainty, but it’s important to capitalize on uncertainties in your market, rather than letting them slow you down. Companies that grow fearlessly know that highly predictable markets often create situations in which all competitors look alike and margins are thin — thus, market uncertainties can create new opportunities for them to differentiate themselves. These companies are willing to take prudent risks and know how to manage risk. In short, they operate confidently in uncertainty.
Uncertainty creates opportunities to pull ahead of the competition. Having the right risk mentality and moving quickly gives you an advantage over competitors that are slower to respond. Take a cue from the film industry and try placing multiple small bets. Repeat past successes and keep budgets realistic and proportionate to projects. You can also target niche customer groups that you can uniquely please.
Rule #2: Get in sync with your customers.
Your customers are a powerful yet often underutilized source of ideas for new products and services, improved current offerings, and new ways to do business. In fact, they’re often willing to contribute by giving product improvement ideas, technical support for other customers, videos, reviews, referrals, content related to your products, and other marketing value; all of which helps you stay in sync, mitigate risk, and remain prepared for whatever the future might bring.
You can stay ready for the future by collaborating with customers, paying attention to outliers, and observing how customers customize and use your products. Even top executives are getting involved in customer interaction. Home Depot executives work in the stores, helping customers and providing advice just as a typical store associate would. But there are plenty of other ways for companies and customers to collaborate.
When you allow your customers to customize the products and services you sell, you’re able to learn a lot about them. This gives you the information you need to innovate new products and services and ways of doing things, and stimulate growth. You can also observe and cater to your outlier customers — the ones who use your products and services in unusual ways — to gain insights. They can provide you with a window into emerging market trends and ideas for new products and services.
Rule #3: Partner, borrow, and share.
In the past, businesses needed to own or take responsibility for every aspect of their value chain, from research to development to operations to sales and marketing. Not anymore. Today, businesses that grow fearlessly crowdsource, outsource, and make use of freelancers, bloggers, microbusinesses, individual innovators, and myriad partners to achieve far more than they could on their own.
You don’t need physical assets to grow huge in terms of reach and value. Alibaba is the most valuable company in Asia, but it has no inventory. Airbnb has a greater market capitalization than Marriott, but owns no hotels or real estate. Uber is the world’s largest car service, but owns no cars.
If you can collaborate with others outside your company, you can experience rapid adaption when the market changes. Plus, it benefits you to outsource things that are not your distinctive competency. All of this can leverage the ideas and capabilities outside your organization, while strengthening the people, processes, and capabilities inside it.
Rule #4: Connect and strengthen your ecosystem.
When you create the right ecosystem for your company, it will take on a life of its own and grow itself. Look at Airbnb: Before they came along, staying in someone’s home was risky business because guests did not know who to trust. But Airbnb solves this problem by creating a platform for guests and hosts to score each other. And many guests enjoy making friends with their hosts, having access to advice about local haunts, great places to eat, and how to escape the tourist trail.
Once an ecosystem gets going, it becomes self-sustaining and enables fearless growth. Figure out who’s already in your company’s ecosystem and whom you would ideally like to have there. Then determine what value you would like each member to both give and receive. Consider creating a technology platform to enable richer interactions between ecosystem members and facilitate and nurture their real-life relationships with each other as well. Building the strength, size, and participation in your ecosystem can fuel growth, build customer loyalty, and insulate your company from market upsets.
Rule #5: Open the floodgates of employee creativity.
Employees want to be engaged in their work and want to contribute to something greater than themselves. Too often, however, employers squander their talent by over-measuring, micromanaging, and failing to inspire. They may even punish employees who get too far ahead of company management, instead of rewarding them for their initiative. It’s important to facilitate employees’ natural desire to collaborate with others and to grow their own skills. By giving employees the freedom, knowledge, and network they need, you will unlock vast power.
There are many steps you can take to get the best from your employees. First, don’t be afraid to say, ‘I don’t know.’ Revealing your own ignorance welcomes people at all levels to share their opinions and perspectives. You can also energize them by instilling a sense of purpose, which will especially appeal to millennials.
Be sure to continually pose new questions and challenge assumptions by introducing competition or games to stimulate new ways of thinking and free people to take risks. Allow new ways to work by encouraging collaboration and forming project-based groups, rather than top-down structures. Finally, communicate your values clearly and frequently, so employees know what you expect, even when no one is looking.
Rule #6: Learn fast and fearlessly.
Fast learning, coupled with an “experimentation mindset,” is the most valuable competitive advantage a company can build. For example, UPS knows that regulations may someday require lower emissions and improved fuel efficiency, so it has a “rolling laboratory” of 11 different types of alternative-fuel and advanced-technology vehicles in use today. UPS is ahead of regulations in learning how to optimize each vehicle for the various driving conditions — from dense urban driving to remote rural driving.
Keenly observing the business environment, taking action before you feel fully ready, and incorporating what you’ve learned immediately into your strategy are all tickets to playing in today’s fast-changing global economy. Make sure you are constantly experimenting, learning from successes and failures, and applying your knowledge. Anticipate the changes in your business environment and set specific learning goals based on those changes. Take action and begin learning the moment you know what you need to learn to be successful.
Rule #7: Build trust into all you do.
Trust is the ingredient that enables the growth of relationships with employees, business partners, customers, and those in your work community. By trusting that your colleagues will do their part, you can set more aggressive goals, place bigger bets, and have a bigger imagination about what may be possible. When there is trust between coworkers, everyone feels comfortable engaging in the debate and disagreement required to make sound decisions. Trusting your business partners means you can move faster together, navigating uncertain terrain with greater confidence.
Trust speeds innovation and growth and improves efficiency. To begin building trust, work to neutralize fear in your organization, making it psychologically safe for employees to voice their ideas and opinions, make decisions, take action, gain new skills, and try new things. When you give people challenging but realistic goals, act in a transparent way, show vulnerability, grant people discretion about how they do their work, and show appreciation for work done well, you’ll be amazed how much your team can accomplish. Finally, foster and expect creative conflict by encouraging employees to disagree and challenge each other.
If you’re starting to get the picture that the old ways of doing business no longer work, you’re exactly right.
Like it or not, it’s time to throw out the old rule book and start fresh with approaches that make sense for the new economy. The strategies that help you facilitate trust, learning, creativity, and partnership seem counterintuitive at first, but will soon pave the way to success not only for you but for your team and your customers as well.
Amanda Setili, author of “Fearless Growth: The New Rules to Stay Competitive, Foster Innovation, and Dominate Your Markets“, is president of strategy consulting firm Setili & Associates. An internationally acclaimed expert on strategic agility®, she gives her clients unbiased and laser-clear advice on how to respond quickly and intelligently to a changing marketplace. A past employee of McKinsey & Company and Kimberly-Clark, Setili served as an executive with successful disruptive technology startups in the U.S. and Malaysia.