The most successful growth companies tend to adopt the following best practices and seem to reap the benefits of utilizing them:
Substitute the S-Curve
All products, markets, and business models go through a predictable cycle of growth and maturity, often depicted in an S-curve. As a result of this process nothing grows forever. The law of diminishing returns sets in usually, when the most attractive customers are reached and price competition emerges. The product loses its growth momentum, larger customer support challenges emerge, and new operating skills are required to continue product evolution. Once the reality of the S-curve becomes apparent inside a company, it may be too late to design the next growth strategy. Therefore, the time to innovate is when the first growth curve hits an upward sloping point. How can you tell you are reaching such a point? Actually you do not, so the best companies focus on making innovation a continuous process.
Lean on Customers
Successful growth companies have a deep understanding of their customers’ problems. Many are embracing tools such as the customer empathy mapping to uncover new opportunities to create value for these customers. The specific customer insights are the foundation of a lean approach to product innovation through techniques and tools like rapid prototyping, design sprints, design partnerships with lead users, and pivoting to improve the target product and target business model. It’s amazing how few companies invest their time to get out of the office and interact with their customers, apart from a strict sales call.
Think like a Designer
Company managers are trained to make choices, however, they don’t always have the best possible options to choose from. Innovation involves the process of creating new options, which did not exist in the first place. The best companies use a variety of tools, like Design Thinking, Blue Ocean Strategy and Business Model Canvas to search for new market space and make competition irrelevant.
Lead the Way
Unless the CEO makes innovation a Company priority, it won’t happen. Innovation requires a level of risk-taking and failure that’s impossible without CxO level support. The best growth companies create and grow a culture of innovation that encompasses risk-taking, experimentation and failure. Most important are their corporate leaders that play the innovation role models. Every employee understands the CEO’s views on risk-taking and innovation when it’s clearly articulated through his/her actions.
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Christos Lytras – Managing Partner