Technology adoption is moving faster than at any time previously experienced.
In the past, the evolution of technology was driven by vendors who developed inspiring enhancements that businesses and their clients welcomed, creating opportunities to diversify their markets. But as we prepare to enter a new decade, everyone has recognised that our lives have been impacted by technology, because we expect it – not necessarily because others tell us it’s good.
From a business standpoint, the ability to plan ahead 3-5 years to ensure stability has gone. As business paradigms transform, so too much business planning.
Business planning is transforming
Organisations still rely on stable, predictable, cyclical growth. All of which is predicated on the customers and the category remaining the same, and power shuttling between various vendors. This type of growth reassures investors, vendors and customers that they have their finger on the pulse of their industry.
Technological advancement has changed this cosy situation, necessitating a new approach to business planning. Using cyclical patterns to plan is still possible, but is essentially an inward-looking, ‘bunker’ mentality that misses the opportunity to recognise how the market is changing (which requires you to put your head outside the bunker).
In contrast, so-called secular growth represents a ‘not to be repeated’ expansion of the market that occurs whenever a new category or a new class of customer is brought on board.
Organisations that focus their business planning on cyclical growth allow for mistakes with plenty of time to adjust and re-establish their presence. Secular change comes whether you like it or not, and at a speed you may not be comfortable with. If you miss it then it’s a wasted opportunity that will never pass your way again. Missing out on secular growth can be a disaster.
5G, superfast broadband and Connected Things are all set to disrupt the telecoms market – stimulating new secular growth opportunities for service providers that can align to them.
Meanwhile, the fourth industrial revolution is bringing a wide range of secular growth opportunities for B2B customers. While in the commercial market, the sheer amount of new technology and change resulting from customer-centric, experience-focused digital transformation strategies presents an exciting but baffling range of choices for many organisations that are having to rethink the way they do business, as the business paradigm itself transforms. New risks need to be navigated; new opportunities grasped. Established organisations that miss these opportunities to diversify will be outsmarted by nimbler competitors that have no historic [product] baggage to maintain.
All of which means B2B service providers need to understand not only how their own business is changing, but also how their customers’ businesses are transforming.
All of this begs the question: how do you embrace secular growth markets?
Planning for secular growth
Planning for cyclical growth is an internally-focused process, where business unit leaders all plan for the future (the next fiscal period) based on growing reasonable percentage points and allocating existing resources to execute this growth. In many cases this has to be done along with a cut in budgets to make operational profitability more attractive.
Secular growth planning operates as if you are a start-up, even though you may have a well-established market.
Think about Apple: they are well established and have a solid market-leading position in the communications market (phones and wearables). Their cyclical growth is understood – not only the purchasing behaviour of their customers but also the trends in this market for optimising the individual experience.
The content streaming market disrupted conventional TV by accelerating ‘cord cutting’ and allowing users the flexibility to watch on-demand, anywhere and at any time.
These markets align to secular growth as the recognised brands in them had the opportunity to not just attract new revenues but define how the market evolved. Apple identified this opportunity by looking outside their bunker of established communications devices, acknowledging what Netflix was establishing, and recognising that Disney and Warner are priming their services for availability in late 2019/2020.
It recognised that if it didn’t diversify its existing Apple TV to align to the category change early, it would miss the opportunity and only be capable of delivering its existing Apple TV commodity offering, rather than having the ability to steer the direction of the category with Apple TV+.
What this tells us is that the ability to react to a new market opportunity requires companies to not be internally biased in their research as well as scrupulously honest when they answer the following:
- Does our existing purpose align to that required by our market?
- What would it take for us to be a leader in this new view of our market?
- Do our specialist disciplines (business unit functions) have the capability to address this market (sales, product, people, etc)?
Once you have understood the possible opportunity, you are then able to make a clear judgement if this is something that your organisation wishes to pursue. Remember that some opportunities are not right for every organisation. Finding an opportunity is not a fait accompli. But if your planning incorporates secular growth opportunities then you know how to make the decision as to whether the opportunity is something you wish to pursue, and what the consequences are likely to be. You would also have scoped out the newly-understood customer need and resolution. Next, you would revisit your cyclical growth planning and integrate the new opportunity into resource allocations – evolving your business planning to appreciate the established with diversity.
This new approach to planning is about driving collaboration across your specialist disciplines, ensuring that each has the resources available to give your new strategy every opportunity to succeed.
Both types of growth have their place. While cyclical growth keeps the lights on. Secular growth strengthens innovation and enables the lights to glow a little more brightly.
Omnisperience’s view
At Omnisperience our approach continues to provide our clients with growth strategies that appreciate their investment in technologies and people, but ensure that they are aware of the changing landscape that their buyers need to navigate.
We believe the traditional analyst and research group approach of forecasting your business’s future value is increasingly more blue sky than the reality of opportunity. Omnisperience cuts through the hype, identifying real opportunities that can influence your future product mix, based on actual client need, and helping you navigate towards and connect with real opportunities. We don’t just write the strategy, but also have the skills to help guide you through commercial, technological and business transformation, ensuring that you align all of your disciplines with the agreed outcome.