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“Cue the Jaws Music”
by Andy
September 30, 2009

“Ba-dum.”  Do you hear it?  It just starts with a small little ba-dum.  At first you think nothing of it and go back to what you were doing — completely oblivious to anything going on.  “Ba-dum.”  There it is again, and you start to notice some rippling in the water.  Then, it starts to get louder.  “BA-DUM, BA-DUM”.  And faster.  Louder, and faster!  Next thing you know, you’ve been eaten alive.

This is the dilemma facing any company.  Many recent comments posted to the Relevancy Blog have pointed out this exact situation.  How do you keep existing customers/clients happy while positioning your company for future growth?  It can be very paralyzing.

As any category matures, growth involves expanding beyond the strict boundaries of what got you there.  Market conditions change.  Customers change.  Suppliers change.  In some cases, it’s about leaving the category altogether.  This can be very disruptive to current operations and to the clients/customers you rely on everyday.

Xerox is going through this situation right now.  With their $5.6 Billion acquisition of ACS (back-office management firm), they are trying to take a page out of IBM’s playbook and become service providers beyond the hardware they sell.  It’s worked great for IBM and consulting services is their most profitable part of their business.  It has allowed them to stay ahead of the sharks.

Xerox, on the other hand, has been mired in a funk of mediocrity.  The 103 year-old mega brand has been swimming slowly.  Just like Kodak and our Big Three automakers, Xerox has been slow to adjust to business currents and was, at best, treading water while others nimbly swam faster to the shores of new growth and safety.

The reality is that it’s hard to go forward when you’re constantly looking back.  What would your existing clients do/think if you were to change what you do?  Will it dramatically disrupt ongoing operations – the gasoline that keeps the business running?  If we focus too much on new technologies for tomorrow, how can we stay expertly positioned today?

This is a strategic question.  First, is your Value Proposition broad enough to take on new initiatives?  If your Value Proposition is primarily based on the products you sell, rather than the value you provide, you’re in trouble.  Second, communicate to everyone (customers, employees, shareholders, Wall Street) that your company stands for more than the products you sell.

Once you’ve effectively primed the market that your Value Proposition is large enough to take on more, then the market will talk about your new growth initiatives in terms such as “good synergies” and “logical fit.”  That’s because they are pre-believers in you.  More importantly, they know that your future growth will not only benefit you, but them as well.

Now, cue Chief Brody with the gun atop the listing mast.  “Smile, you son-of-a…”

3 Responses to ““Cue the Jaws Music””

  1. Great post. There really is a great challenge in moving forward to stay or become relevant in new categories and a changing climate while also balancing your relevancy to client’s existing business. Ideally, you want that value prop to meet new and emerging needs for existing clients.

    Love the Jaws reference. Now I’m going to watch my back and my client’s, don’t want them getting their legs bit off.

  2. This post nails it. An effective strategy for embracing change without disrupting current customers is to establish your enterprise as being about more than the products/services you provide. When a client understands that their success is your success (and vice versa) they cease being merely a customer and become something more important: a partner.

  3. Core Competency is the strategic principal that Xerox and other large companies have doggedly held on to without serious evaluation of their Value Proposition. Hence they fail to see market trends become established and errode their value to customers. It is easy for such companies to stay afloat when their market is limited to one or two competitors, but in a global economy there may be tens or hundreds of them chomping at their market share. The upper management is responsible for evaluating such risks and taking mitigating action, but like a large ship with a small rudder most end up on the rocks because their actions were too little, too late. Look at what Xerox missed out on because of their miopic views; ethernet, computer networking, the computer mouse, GUIs, …

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