In my B2B Executive Playbook, I take my readers through the four steps that can simplify strategic planning, focus product development and sales and marketing efforts, and most importantly, create a clear path to market leadership. In this four-part series, Avoiding the Pitfalls to B2B Success, I review the common pitfalls that challenge B2B firms. Be aware of them and act quickly if they surface in your company.
The first pitfall is a mindset among the leadership team that goes something like this: “Hey, we’re smart and we’ve been in this industry for many years. Let’s brainstorm among ourselves and come up with the next great solution we can bring to market to change the game and win back our leadership position.” The leadership teams of B2B companies do indeed have deep stores of knowledge and creativity, but when they choose to go it alone, what they are really saying is, “We know better than our customers what they want and need.”
And this is a prescription for failure.
Far too often, the inside-only ideas and solutions that come out of these sessions are not created with current market conditions or even company resources, business models, and competencies in mind. In fact, they are usually based on legacy customer needs, current competitor offerings, or misguided ideas about a problem that may not even exist in the customer’s mind. This insular approach significantly contributes to the 60-70 percent product failure rate that continues to plague companies.
The leaders of a $1 billion company invested more than $100 million in developing a single solution they were convinced would revolutionize their market. They did this without asking a single customer to validate the idea. The result was a disaster. Virtually no customers wanted the solution because it couldn’t be integrated with their existing operations, and the few who did buy, demanded to return it for a full refund, plus damages. The stock tumbled, the leadership team was fired, and the company was sold off at a major discount to a company one-fifth its size.
Successful B2B companies systemically include their top customers in the development process. At Henny Penny, for example, all innovation and planning initiatives begin with the needs of customers and the market. “This is the backbone of our culture, strategic planning, and success,” explains President and CEO, Rob Connelly. With so many strategic and development alternatives to choose from, you must tap your top customers to prioritize, justify, and focus on those options that will deliver the most impact. Leveraging their industry knowledge through “outside-inside” thinking is the best way to secure market alignment and achieve profitable growth over the long-term.♦©2017 Geehan Group
Read the other articles in this series:
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