Accelerating Growth: Overcoming the Chasms of Failure™ (Part five of a five-part series)

Posted on

Sustainable, ambitious growth is probably near the top of your priority list. But we all know it’s not easy to achieve, even with the right team and a great product. In parts two, three and four of this series, I offered some pretty dire warnings about what can go wrong as you work to reach that ambitious growth goal. You might find that your product plans or roadmap don’t quite match what your customers need (the Chasm of Failure to Deliver™) or that your people might not know how to keep the promises you’ve made to your customers (the Chasm of Failure to Execute™). The most dangerous of the Chasms of Failure is the one you fall into when you don’t really understand your customer well, or your understanding of the promises you make to your customer don’t match your customer’s understanding. That is called the Chasm of Failure to Focus™ and almost always results in internal chaos and wasted resources. But despite my dire warnings, there is a way out of the Chasms of Failure and back onto the path to growth.

Every company I’ve worked with — or, for that matter, seen — falls into at least one of the Chasms of Failure at some point, and sometimes at several points. What matters most is not that you’ve found yourself there, but that you know how to pull yourself out of it and get back on track.

In this final part of this series, I will show you how to identify the symptoms of each Chasm of Failure and offer some things to consider to get back on track. I don’t know your specific situation yet, but I’ll show you what other companies have done to succeed. Finally, I’ll give you a framework to help ensdure you’re firing on all cylinders and keeping all the parts of your business on track to growth.

Knowing the symptoms

Every company will find themselves in a Chasm of Failure sooner or later. Some of the symptoms by which you’ll know are common to all three Chasms of Failure, and others are specific. You may find you have unique versions of these, depending on your company’s business, structure and culture. Here’s what to watch for:

Symptoms of the Chasms of Failure

Symptoms common to all three Chasms of Failure
● Growth begins to feel much harder
● Sales reps are scrambling to find or save deals
● Marketing is desperate for new lead sources
● Customer retention starts to drop

Chasm of Failure to Focus

Chasm of Failure to Deliver

Chasm of Failure to Execute

● No two of your people have the same definition of your customer
● Confusion in the handoff from sales to customer success
● Dropping lead acceptance rate by sales
● Adoption rates drop
● Noticeable increase in customer dissatisfaction after a few months
● Large increase in support requests and escalations
● Salespeople promise anything to get a deal
● Increase in escalations to managers in sales and customer support/success
● Your team is confused about the right thing to do for your customer

Escaping the Chasms of Failure

Tactics common to all three Chasms of Failure
● Balance your focus among getting your Promises, your People and your Product right (see diagram below)
● Identify areas of disagreement or confusion, and clarify

Chasm of Failure to Focus

Chasm of Failure to Deliver

Chasm of Failure to Execute

● Know how your capabilities map to your customers’ concerns
● Be clear and precise on your promises to your customers
● Ask your customers, and make sure their understanding of the promises is the same as yours
● Ask your customers where the product doesn’t match expectations
● Examine your roadmap and ensure it matches your promises
● Ensure your capabilities can fulfill your promises
● Be sure the definition of your customer is clear and well-communicated
● Define precisely how every person on your team contributes to fulfilling your promises

Take a look at the earlier parts of this series for more discussion on what can happen in each chasm, and how to escape or avoid it.

I hope this will help you take an honest look at your challenges, and understand better why you are experiencing them and how to make your path to growth a lot smoother and faster.

Firing on all cylinders

I would like to see your company focused, executing smoothly and delivering consistently. But companies with which I’ve worked often focus on two main areas to try to make sure they are meeting customer needs and aspirations: First, they want to make sure customers are “delighted.” This usually involves surveys or, sometimes, direct interviews. Second, they try to measure customer trust. This is usually a binary measurement, meaning the conclusion is that a customer considers the company a trusted adviser or it doesn’t (trust is far more complex than that, as I’ll discuss in an upcoming series). But they miss most of the points on which they must excel in order to achieve the kind of ambitious growth I suspect you want.

Your Growth Roadmap

To achieve that level of growth, it’s important to look at each of the main areas necessary to succeed across each of the parts of your business that must fall into alignment.

Achieving focus means you must understand your customers well to create a strong relationship. Your product roadmap must be precisely targeted, and your people must have a map for the actions they will take to support that relationship

Executing well means you must make the right promises that match with your customers’ needs and aspirations. Your product must deliver on target according to your roadmap, and your people must produce consistent outcomes for your customers.

Delivering means your customers are invested in your promises and get excited about them. Your product must delight your customers, and your people must build and maintain the trust you have worked to earn.

Those last two items are where you are likely already putting in significant effort and are the ultimate measures of your success. But the hard work of getting all nine areas right is what you must do to achieve that.

I hope you’ve found some value and useful ideas in this series. If you’re interested in understanding better where you stand, what issues you might be able to avoid or how to build a trust-base growth strategy that will bring you to market leadership, please feel free to contact me.

I look forward to hearing your stories.

Customer Trust

Are You Really Customer-Centric? Or Is It Just Talk?

Posted on

It seems every company wants to show just how customer-centric it is these days.  It’s increasingly common to hear PR machines toss around phrases such as, “We value our customers,” or “We put our customers at the center of our business.”

But it’s easier said than done.  When it comes time to make a decision that pits customer interests against a chosen corporate strategy, do you really make decisions that put your customers first?

A.P. Giannini, founder of Bank of America, said, “The purpose of a business is to create a customer.”  If, in the process of evolving your business, you choose to forsake some (or all) of your customers, you not only have no longer put customers at the center of your business but also have given up the business those customers represent.

A recent stark example of the conflict between a chosen corporate strategy and a customer-centric one is the recent decision by Starbucks to close a number of its brands, including San Francisco icon La Boulange.

La Boulange is a chain of bakery cafes in San Francisco that has a reputation for quality food at reasonable prices and has earned the trust and devotion of San Francisco Bay Area locals. This is important to this story, as earning the trust of San Franciscans, as a whole, is not easy, and locals tend to fiercely defend local brands, often at the expense of national brands.

When Starbucks acquired La Boulange in April 2013, there was a local uproar.  Would they keep the beloved cafes open?  Would we be deprived of La Boulange baked goods?  What would happen to the people working at them?

Starbucks is one of those companies that claims to employ a customer-centric business strategy.  Putting customers first means making a promise to those customers, then keeping that promise.  And, of course, not breaking it.  Starbucks made a promise. They kept that promise—until they broke that promise by making a decision that clearly put their chosen corporate strategy ahead of their customers’ wishes.

Make a promise:  At the time of the acquisition, Starbucks stated it would keep the cafes open and even offer La Boulange baked goods in its Starbucks coffee shops.

Keep a promise:  It held to this promise.  It even opened more locations of La Boulange during the two years since the acquisition.

I cannot overemphasize this point:  Starbucks made and kept a promise to the segment of consumers who value and frequent La Boulange.  San Franciscans breathed a collective sigh of baked-good-induced relief.

Break a promise:  Last week, Starbucks announced it would close all La Boulange locations by the end of September 2015.

The justification for the decision was, in Starbucks’ words, “Starbucks has determined La Boulange stores are not sustainable for the company’s long-term growth” and that the decision was made because “Starbucks continually evaluates all components of its business to confirm they are aligned with key priorities and strategies for growth, which includes the continued analysis of the store portfolio.”  Notably, the decision was not made based on profitability, as the company claims the La Boulange brand achieved 16% year-over-year growth, and industry reports show that the newly opened stores far exceeded expectations.

In a company that claims to put its customers first, what is missing from this decision is any consideration of the promise to the customers.

Which brings me to the difficult question Starbucks faced:  Do we follow our chosen corporate strategy or do we make our strategic decisions by putting our customers first?  I wonder how you or I would make the same decision.

Traditional corporate strategy says a company should choose its competencies, market, and customer segment, pursue them to the exclusion of other options, re-evaluate those choices periodically (or continually), and make adjustments.

Customer-centric strategy demands a different approach.  If the customer is truly at the center of your business, then your business must choose its competencies, approach, and services to focus on the needs (known, unknown, or even unanticipated) of the customer. This is true whether your customer is an individual consumer or another business.

Making the choice between a chosen strategy and customer-centricity is not always as stark or obvious as it is in this case.  Companies face decisions every day that pit delivering value to customers against the chosen strategy of the business.  If your company chooses the chosen strategy and moves away from the customer it created, it must either create a new customer or face the fact that it no longer has a business (at least in that segment).

Starbucks’ mission statement is “to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time.”  The core Starbucks brand will continue to do that. But the La Boulange brand did that exact same thing for a different customer in a different way (appropriate to that different customer).  Despite Starbucks’ statement that this decision was one that keeps their mission intact, it seems that the other decision (to keep La Boulange open) would have done that as well.

So, while the decision does not directly conflict with the mission statement, it does conflict with any claim of customer-centricity.

All of which presents us with a stark example of how even the best companies make difficult strategic decisions when customer interests collide with a chosen strategy.

Have you faced such a decision?  How have you handled it?