The dichotomy of building sales today versus innovating for tomorrow
Selling today is important, but creating a new tomorrow is equally if not more crucial for a company’s success.
Many industries are in the throes of disruption. Caused by technology, emerging startups or consumer behaviors - all changing the value proposition a company needs to provide to their consumers. Looking at industries like auto, hospitality, music, beauty, even mattresses, we see this shift happening faster than most brands can respond.
Disruption is putting increasing growth pressure on CEOs and CMOs in many traditional companies. Not only are they faced with how the company needs to respond to threats and trends today, but they have to make the right decisions to set a transformative vision for the future of the company. Put this up against the growing need to drive short term shareholder value and the management teams of these organizations are in a tight spot.
So how do we balance out the dichotomy of driving sales today, while preparing the organization for the inevitable disruption of the future?
Sales today will always be a high priority for all organizations. It creates the capital and cash flow needed to live another day and to fund research and development. However, not investing in the future could create a massive issue. Three ways business leaders are tackling this issue are:
The best time to innovate was yesterday. The second best time is today. In today’s business environment, the companies that are becoming leaders in their industries are the ones that continuously innovate and pivot based on market demands and trends. However, many of the companies doing this correctly are the disruptors. The process to get to this type transformation doesn’t necessarily mean that you have to give up on your core products or services. It means that you need to come to the table with eyes wide open about consumer behaviors, market trends and the value propositions that are changing the industry. Apple just launched a sweet of services using this approach. This investment in innovation will do two things, understand how to provide incremental value today and prepare the organization for the long term value needed to succeed in the future.
Our good friend and advisor Dave Knox has literally written the book on strategic partnerships between big, established brands and emerging startups. In his book “Predicting the Turn: The High Stakes Game Between Between Startups and Blue Chips,” he discusses how these partnerships can give larger, more established market leaders in an industry the opportunity to build new value in the marketplace. He shows how market leaders have successfully created strategic partnerships with startups in their industry to catch up to and get ahead of the consumer behavior and technology trends.
Mergers & Acquisitions
Another approach to establish a strategic balance between sales today and tomorrow is Mergers & Acquisitions. Many established companies are using this approach to buy their way through the disruption effecting their industry. Look at Walmart. They are up against one of the biggest business transformations in our lifetime - ecommerce and Amazon. They are betting on creating an omnichannel approach of leveraging their physical stores and their low-price relationships with their suppliers to expand into ecommerce and delivery with several of their recent acquisitions like Bonobos and Jet.com. It’s too early to tell how it will pay off, but it’s a step in the right direction.
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