Why your laser-focus on products & customers is killing your business

Remember Clayton Christensen’s classic, The Innovator’s Dilemma? It was the brilliant observation of how well-managed market leaders would almost invariably fall prey to disruptive technology, and fail to capture the next wave of value.

What was startling about Christensen’s work was that the incumbent firms were well-managed and made rational decisions at each stage of the market’s development. Yet still they lost.

Today I want to explore what could be called The Owner’s Dilemma.

I’m going to explain why the pragmatic, rational decisions you are making are undermining your business’s ability to grow.

The two top priorities of every business owner

Let’s picture the typical situation in most businesses:

You have limited resources. You are pushing for growth. Everyone is rushed off their feet. Cash flow is constantly top-of-mind. As the P&L owner, you are focused on the twin drivers of revenue: products and customers. If it doesn’t improve the product or doesn’t win a customer, it’s not a priority.

Your laser focus is necessary. It’s admirable. It’s the right thing. And yet, in powerful but unseen ways it’s actually slowing your business down.

It’s that the twin focus on product and customer has excluded any meaningful investment in the hidden foundations of the business:

• Firstly, people. Because it’s people who build the product. It’s people who close the deals. It’s people who serve the customers.
• Secondly, organisational clarity. Because people operate in the context of the larger organisation. So to contribute at their highest potential they need a shared view of what long-term success looks like, how decisions should be made, how the organisation should function and what ‘getting to the next level’ looks like.

But instead, almost all the attention remains on the ‘cash zone’. So what typically happens? Something like this:

Your employees aren’t receiving the intentional investment to grow in the areas that are holding them back. Some people are growing, but it’s accidental and unplanned, and other people have stagnated. As a result, everyone is maxed out, especially you.

The organisation is like a car that’s long overdue a service. There are misalignments ‘in the system’ that require constant time, energy and attention to correct. Sometimes these manifest as relationship issues and disputes, sometimes as wasted work cycles and lack of teamwork, sometimes as failure to execute.

Your “team” feels more like a collection of individuals. Team meetings are mediocre, with some people barely contributing and others dominating the discussion. You feel certain issues aren’t being put on the table. You spend most of the agenda fighting fires rather than making the big bold decisions that will move the needle.

Unsure where your team stands? Take 100 seconds to complete this simple Team Assessment and get an instant quantified read-out on your performance and development priorities.

A problem so pervasive, it almost feels normal

This lack of attention to the underpinnings of the business is a major recurring issue in businesses around the world. So much so that we can think there is no other way.

Perhaps that's why we find only 13% of employees are actively engaged at work (Gallup); 86% of business leaders have an inadequate leadership pipeline (Deloitte) and 79% of business leaders have a significant recruitment, retention and engagement problem.

In 2001, Douglas Conant started the turnaround of the Campbell Soup Co. and lifted its performance to incredible heights. One of his secrets? Employee engagement.

“To win in the marketplace we believe you must first win in the workplace. I’m obsessed with keeping employee engagement front and center and keeping up energy around it.” ~ Douglas Conant

A quick check

So, how much attention are you giving to each of these four activities?

• Customers: Identifying prospects and acquiring new customers and channel partners. Managing the sales pipeline. Serving go-to-market partners and customers and dealing with support issues.
• Products: Developing value propositions, building product and service roadmaps and addressing quality or feature issues. Working on the product itself. Dealing with suppliers and partners.
• Employees: Developing internal leadership capability and skills transfer. Ensuring the team is functioning at its highest potential. Ensuring the right person is in the right role. Creating an environment that retains the best talent. Building alignment and motivation.
• Organisation: Providing clarity on the overarching mission and vision. Embedding a clear set of decision-making criteria to align the whole team. Ensuring everyone knows how they contribute to achieving business's big goals. Allocating people, resources and capital to the highest-returning opportunities.

Allocate 10 points across the four categories, reflecting how much attention you give each area. Reflect on whether this is the most strategic balance.

So – how did you score? Where are you over-investing and where do you need to apply more intentionality and focus?

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Richard Medcalf specialises in building & multiplying high-performance leaders & teams, and 'virally' transitioning company cultures to adapt to digital disruption/transformation.

If you found this article interesting, you may benefit from this simple Team Assessment - takes about 100 seconds to get an instant quantified read-out on your performance and development priorities.