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Three Tips for Building a Better Business in a Fluid Market

By March 27, 2012Article

Innovative software development tools, low-cost manufacturing and global infrastructure all make it easier than ever to start a business. Building a successful business, however, remains challenging. Add in the need to adapt to – or, better yet, leverage – fluid changes in customers, competitors and the overall market, and it’s easy to see why so few companies hit it big.
The task of leadership is first and foremost to hold out a vision for the future and, second, to lead towards it. Even with clarity of vision, the path ahead is continually interrupted by a rapidly changing environment, often transforming well thought-out plans into liabilities. In this article, I focus on the second part, navigating a path towards the vision.
Success or failure depends on your ability to make complex decisions while leading your organization through a remarkably fluid business environment. Savvy executives increase their odds of building a better business that thrives in this climate by creating more autonomy, using data to establish a richer context, and not thinking about customers in transactional terms.
Create a more autonomous organization
The traditional top-down management structure is being reshaped by a pair of meta-trends.
First, society, education and business are all moving towards relationship networks. Relationship networks, when combined with communications technology such as social media, change not only behavior but also customer expectations about how they interact with you. These customers spend less time seeking information because they have growing expectations that the right information will find them. Broadcast messaging is ineffective in influencing relationship networks.
Second, the pace of innovation and information flows doesn’t provide time for traditional decision making where information flows up and decisions flow down the organizational hierarchy. Decision making needs to occur closer to the front lines.
Together these trends mean leaders must teach their organizations to be self-directing and to respond autonomously while remaining in strategic alignment. A strong and credible vision is essential for aligning your organization.
Focus data on building a richer context
IDC forecasts that the amount of information managed just by enterprise data centers will expand by a factor of 50 during the next decade. Growth is occurring along three axes – more data, more sources and more complexity – while the decision window is shrinking. You have to deal with more data in less time.
It’s tempting to place data at the center of your decision making. However, your organization generates data faster than you can process it, so more data doesn’t automatically translate into better decisions. Even mountains of data paint an incomplete picture, especially at smaller volumes, leaving you open to confirmation bias. I recommend a different approach for my B2B clients.
I urge my clients to use the vast stores of data available to establish the context into which they make strategic decisions. This represents a reversal for many people who view experience as context, but look to data to drive decisions.
This approach acknowledges – and embraces – that most decisions are more qualitative than quantitative. Think about it. Even in choosing a vendor, quantitative criteria like price and delivery often take a back seat to qualitative factors such as business model fit, ease of doing business and trust. This doesn’t eliminate the confirmation bias; but by forcing you to acknowledge that you are making the decision, not the data, it creates a more transparent process.
Don’t read this as minimizing the impact or value of data. Unlike your BI dashboard, the human brain is a decision engine, and leaders need to lead.
Quantitative and qualitative information sources must work in unison. Analytics and business intelligence are excellent at illuminating trends and quantifying the speed of change, but they tend to create a black-and-white perspective lacking the context needed to make business-critical decisions. Under-appreciating context is dangerous in complex situations.
Stop thinking about customers as transactions
In addition to pushing down the tools and authority to make on-the-spot decisions (you better hire well) and using data appropriately, savvy leaders need to guide their organizations to a new understanding of the customer-company relationship. You acquire rich insights from your customers when you stop thinking about them as transactions to be completed and start viewing them as ongoing interactions to be tended and nurtured.
Interactive customer relationships are more resilient than transactional ones and generate far more than just revenue for your company. This is the Golden Rule in action: if you treat them as partners, they’ll respond in kind. They’ll tell you what you are doing right, what you are doing wrong, why their buddy dropped your company after many years and how you can win him back.
Regular bi-directional interactions between customers, partners and employees encourage the kind of questions that reveal blind spots in your current thinking. Done right, you will be treated to an occasional peek into the future. The peek is often unstructured, so a solid context based on data is essential for discerning how to act.
The more you truly understand the forces shaping change in your markets, the better equipped you are to not merely survive but to actually benefit from rapid change.
A final note and bonus tip. Baseball’s annual spring training provides a helpful reminder that even the best teams can be undone by poor fundamentals. That is why extraordinarily talented, gazillionaire athletes spend weeks in the desert practicing bunting, covering first base and hitting the cut-off man. Rock-solid positioning, a focus on value and a strategic marketing plan based on realistic priorities and resources are keys to excellent execution. As with baseball, the real value is in the execution, not the plan.
Bruce La Fetra develops strategic marketing plans for software, technology and services clients. After more than 20 years as a consultant and practitioner, he launched LaFetra Consulting to help clients elevate marketing to a more strategic role using a service-oriented approach that builds stronger ties between companies, customers and partners. He previously served as Business Strategist with Rubicon Consulting, Director of Industry Marketing for Docent (now SumTotal) and Director of Strategic Marketing & Business Development for Internet Commerce at First Data. Contact him at

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