Springtime Pruning for Growth

As FY02 is well on its way, many are speculating on whether the current recession is over, or when it will end.

Rather than focus on the external dynamics of the macroeconomy–which you can’t control anyway–let’s consider something that you as a leader of your company or division can control. Have you evaluated your sales and marketing operations today and made those decisions necessary to enable growth?

Before a company can be ready for growth, it must take stock of the current business situation–and make those decisions that will prompt sales expansion in the future. Making the decisions for what to cut, what to keep and what needs further investment is a key part of strategy development. This approach can be applied to your product lines, market segments, and resource allocation.

Many companies that are making money today don’t want to prune product lines, marketing efforts, or structures because they have revenues coming from certain product lines or divisions. It is hard to prune a rose bush when there are flowers blooming. The very act of cutting can appear to be destructive rather than constructive. And yet experience proves the need for effective pruning at the right time.

Seven Reasons Why Pruning Is Needed

1. Playing to your strengths allows the company to do what it does best. Whenever a company is working opposite its strengths, it has internal friction and resulting challenges.
2. Completing 100% of the customer requirements for a few sets of customers is better than meeting 50% of many customer requirements. In one case, all your customers love you; in another, no one is fully satisfied. Your strategy: focus on cultivating one set of prize-winning plants rather than on four struggling plants that may not bloom.
3. Doing four disparate things is harder than doing five coordinated things. There is an overhead to managing disparate work and disparate efforts. If you have multiple business units that all require a different infrastructure, your company is not leveraging its assets well.
4. Clarifies your brand. Your brand equity grows when customers connect to the value of what your company offers. Focus on your core products, services, or solutions. By cutting those things that are add-ons, you are making it easier for your customers to value your core strength and understand better what you stand for. Your customers will value the clarity, and it will be easier for them to refer you as a business partner to others.
5. You can partner rather than build it all. Partnerships and strategic alliances generally improve your whole product marketing and delivery systems. It gives you the opportunity to identify valuable thirdparty relationships needed to provide a complete service solution to the customers. In the case of a new market segment, this can mean multiple companies growing the category.
6. Isolated product lines or divisions take time to manage. Streamlining the company deliverables and aligning its go-to market plan means leaders can focus their creativity to grow the company outward rather than managing inward. And, having diversity of efforts can mean management challenges. Streamlining the company deliverables and aligning its go-to-market (GTM) plan means leaders can focus their creativity to grow the company outward rather than managing inward.
7. And, finally, pruning allows for innovation. Innovation happens in an organization when the workload is managed well. When synergy and creativity are sparked, people will find the smart idea that will lead your company to create a leap forward in the market. If everyone is performing full out across disparate efforts, they are likely working hard to coordinate the different pieces and pull it together. If you eliminate the 5% of revenues that cause the 30% of unproductive activity, you might just find a new market opportunity to grow the revenues by 50%.

There are some methodical tools and ways to approach this opportunity:

1. First, perform an audit of your strengths. By identifying your leadership in technology and other assets, you can evaluate your offer to the market in specific ways. Some questions you can ask are, how do your current and pipeline technologies stack up in the category space? How attractive is the category in size today and how fast is it growing? And, where is the category space in the stage of adoption? Does the category have what it needs in the whole system to cause your product line to be considered by the buyer?
2. Evaluate how well you can get your product to market. Do you know who are the buyer, user, influencer and decision-maker so you can make them aware of your product? Has this information been clearly articulated and understood by your entire team? Do you have the channel — direct or indirect — to sell to your select customer base? Do you have a compelling offer — like leadership in price, technology innovation, or buying process ease — to get them to choose you vs. your competitors?
3. And, finally, do you have the infrastructure in place to support the customer long-term? Do you know what your customer requires from systems integration, consulting, 24/7 service, installation or training, and do you have a qualified infrastructure investment to meet their needs? An often over-looked perspective is that you want to support the customer over time. To do so, evaluate how well your internal infrastructure, purchase process, policies, and culture are aligned to manage long-term care and not short-term sales.

Aligning your technological strengths with market requirements is by itself a success. Aligning your investments to capitalize on the market opportunity is the grand finale. When you can line up these things: your core assets and strengths — to the market segments’growth, and how well your company can complete the GTM (go-to-market) connection, you can evaluate what to keep and what to prune. If this is a current issue for you, we can recommend effective, appropriate analytic tools and processes for you to use.

With a deeper understanding of strengths and aligning your organization to focus, your company can grow faster, and be stronger long-term. And that’s what good strategy is all about.