Breaking Business Boundaries: Harnessing White Space Growth in Established Companies

The ability for established companies to drive white space growth is often limited and challenged by its business structure, processes, and sales channels that are optimized to serve the existing customer base.?

It can be challenging to drive new business idea generation within existing business constraints, particularly due to the tendency of focusing on reapplication of existing products. Consequently, ideation sessions often identify incremental growth opportunities rather than trajectory-altering new business pursuits and ideas.

I created a construct to overcome these constraints and break the white space development down into 3 key areas.? I’ll highlight those areas and suggest the functional resources and talent that play a key role in leading or contributing to the process:

1. Reframing the organization’s “Why” - How do you define your business?

Defining the organizational “Why” is critical to setting the market boundaries that a company is willing to play in. In the book, Start With Why, Simon Sinek provides a great example of how Dell and Apple, both essentially computer companies, ended up with varying market success when entering the digital music player product space. Apple’s “Why” is extremely broad in its definition and is best illustrated by a Steve Jobs quote: "Apple at the core, its core value, is that we believe that people with passion can change the world for the better."? This broad definition allows Apple to credibly play in markets well beyond that of a personal computer (at the time).? On the other hand, Dell’s marketing and communication to customers defined its “Why” as a personal computer company that offered customization to meet the consumer’s needs. ? While there were no doubt UX and ecosystem differences between their respective products, the way each company defined their market is vastly different, dramatically impacting adjacent market growth prospects. ? We continue to see that today with Apple’s move into virtual reality as well as rumors of getting into the automotive industry through autonomous vehicles.

Think about it from the perspective of an automotive company.? Do you define your organization as an automotive company?? Only playing in personal vehicle markets. ? Or are you a transportation company? Perhaps playing in cars, trucks, cargo transport, electric air vehicles, etc.? Reframing the business’s “Why” can have a dramatic impact on potential market size.???

You must establish this identity up front to provide the boundaries that define the organization's right-to-play.? If you don’t broaden the aperture, it will be difficult to identify large growth opportunities for established businesses.? It is important to define and communicate the business’s “Why” internally as well as externally, to create commitment and credibility for the organization and the consumer.???

Who are the key players in defining the organizational “Why”?? Business leaders, product managers, and marketing should take the lead here, but there is value in bringing in perspectives from a diverse range of supporting functions - everyone from Human Resources to Supply Chain could provide unique insights into defining a “Why” and vision that is more broad and inspiring to the organization.????

2. Core Competencies - What is the organization good at?

All too often the focus is on existing products and services, or variations of those offerings that can be sold to new customers for new applications.? This can be an effective strategy to drive incremental growth. Optimizing go-to-market plans, modifying sales incentives, or creating new market channels will often be core strategies to continue to fine tune the existing business growth engine.??

But to really find white space opportunities, I believe you have to dig deeper.? What core capabilities does the organization offer?? You have to break it down to a much finer level of detail on what the organization is really good at: manufacturing processes, supply chain expertise, logistics capabilities, specific engineering skills (RF design, analog design, software, etc.), and unique talent.???

There are a number of companies out there that do this well, as well as examples of successful start-ups that pivoted to take an internal capability or competency and turn it into a winning offering.? Amazon is a notable example of an established company that has done this repeatedly.? Examples include Amazon’s move to broaden its marketplace from selling books to selling almost everything, leveraging its logistical excellence to get into the shipping and aviation industries, and the development of AWS which started as an internal IT capability to allow development teams to focus on customer facing innovation.??

The instant messaging and collaboration software suite, Slack, began as an internal tool created by the company Tiny Speck to assist in the development of an online game.? While the online game was shut down in 2012, Slack went on to be acquired by Salesforce in 2021 for $28B.??

A final example is CATIA, a 3D CAD and modeling toolset developed by Dassault for its own aircraft development, then eventually applied to external customers such as Boeing and General Dynamics.? This competency is now at the heart of Dassault Systèmes 3DExperience business that has expanded opportunities beyond aerospace, to diverse markets such as transportation, life sciences, marine, and industrial equipment, to name a few.?

Internal capabilities can often be a key ingredient to fuel new market growth, making it critical to mine and uncover untapped core competencies. Who should lead in identifying and defining organizational capabilities? ? Many of the core functional leaders can play a key role here, including engineering, product management, IT, and supply chain.??

3. Customer Problems - Identifying “Jobs-to-be-done”

Borrowing from the late Clayton Christenson, it’s important to understand why consumers are “hiring” a product and to really understand the customer’s problem-to-be-solved.? Even with an existing product, we can be selling something very different to different customers or different customer segments.? In Christenson’s famous milkshake example, he found a unique customer segment that buys milkshakes, not necessarily as a treat, but rather as a time sink during a long commute.? In this example, not only does this mean we are competing beyond the product category of milkshakes (coffee, snacks, etc.), but the product attributes you need to improve to access this segment may be very different from the attributes that matter in other segments.? Some product differences may include: thickness vs. taste, the milkshake container, drive through service vs. in-store purchase, and potentially the ergonomics for use during a commute.? In this example, the problem to solve wasn’t to make the milkshake tastier, which might be the conclusion through traditional market research or voice-of-the-customer feedback. Here, unlocking growth with a new customer segment is achieved by identifying a unique “job-to-be-done” of the product.?????

Applying this to white space growth tells us that you can’t just focus on existing customer needs or the problems that customers may articulate.? You have to dig deeper, observe the customer, find processes with friction, and reformulate the problem to understand the “job-to-be-done”. ? With these unique insights, new opportunities can be found to create products, services, and solutions that often have no pre-existing competition.? This presents an opportunity to create a new product category and operate in a “Blue Ocean” market space.??

Functions that play a key role in problem identification can include customer service, product management, sales teams, and customer focused engineering teams.? Training these teams in human factors disciplines, training to observe vs. question, and training to think differently is key to successful problem identification.???

With these three elements in place, we can start to combine new market opportunities, identify customer needs, and formulate offerings based on key competencies.? These elements will be critical to delivering the product or service with a clear customer value proposition and capable of delivering and sustaining a long-term competitive advantage.

#WhiteSpaceGrowth, #BusinessTransformation, #OrganizationalWhy, #CoreCompetencies, #JobsToBeDone, #EstablishedCompanies, #BusinessIdeation, #IncrementalGrowth, #CustomerProblemSolving, #BusinessLeadership, #ProductManagement, #MarketOpportunities, #SimonSinek, #ClaytonChristensen, #InnovationStrategy, #StrategicGrowth, #MarketExpansion, #BusinessBoundaries, #CompetitiveAdvantage, #CorporateGrowthStrategy