Ready or Not, Here I Come

Market transitions wait for no one

Many organisations still rely on cyclical growth , which is stable with predicted growth rates and one in which the customers and the categories remain the same as power shuttles here and there amongst various vendors, reassuring investors and customers that the business have their finger on the pulse of their industry. 

The change in technological advancement has meant that a new approach to planning is required. Now, using cyclical patterns to plan for future years is still viable but viewed as essentially a ‘bunker’ mentality that is inward looking for planning, missing the opportunity to put your head over the bunker and recognise that the market is changing or has changed.

The opposite of cyclical growth patterns is secular growth , meaning a “not to be repeated” expansion of the market that occurs whenever a new category or a new class of customers is bought on board*.

Organisations that focus their business planning on cyclical growth allows for mistakes with plenty of time to adjust and re-establish your presence as these markets are predicted. Secular change comes whether you like it or not and is a missed opportunity that will never pass your way again. In short, missing out on secular growth is a disaster.

The fourth industrial revolution is not only about the technology, but also the growth in new start-ups and entrepreneurs who recognise and act on this secular change early. Established organisations missing the opportunity to diversify into secular markets, will be outsmarted by the nimbler competitors that have no historic [product] baggage to maintain.

How do you embrace secular growth markets?

It’s all about change, not radical change but evolutionary change.

Cyclical growth planning is an internal focused process, where business unit leaders all plan for the future (the next fiscal) based on growing reasonable percentage points, allocating existing resources to execute this growth and all of this in many cases with a cut in budgets to make the operational profitability more attractive.

Secular growth planning operates as if you are a start-up, even though you may have a well-established market.

Think about Apple, they are well established and have a solid market leading position in the communications market (phones and wearables). Their cyclical growth is understood, not only the purchasing behaviours of their customers but also the trends in this market for optimising the individual experience. 

The content streaming market disrupted conventional TV by accelerating “cutting the cord**” and allowing users the flexibility to ‘watch on demand’ anywhere and at any time. This market aligns to secular growth as the recognised brands have the opportunity to attract new revenues but more significantly define how the market will evolve. 

Apple saw this opportunity, by looking outside the bunker of their established communications strategy, acknowledging what Netflix had established and also recognising that Disney and Warner (HBO Max) are priming their services for availability in late 2019/2020. If they didn’t make the decision to diversify their existing Apple TV to align tightly to the category early, they would miss the opportunity and only be capable of delivering their existing Apple TV commodity offering, rather than have the ability to steer the direction of the category with Apple TV+.

Your ability to react to a new market opportunity requires everyone to agree not to be internally biased in your research and honest when able to answer the following:

• Does our existing purpose align to that required of our market?
  
• What would it take for us to be a leader in this new view of our market?
  
• Do our specialist disciplines (business unit functions) have the capability to address this market; sales, product, people, etc?
  

Once you have understood the possible opportunity available, you are then able to make a clear judgement if this is something that your organisation wishes to pursue. Remember that some opportunities are not right for your organisations. Finding a new opportunity is not a fait accompli, but you now have the data to make the decision if it is something your business wishes to pursue. 

If agreed, you now have the newly understood customer need and resolution scoped out. You should now revisit your cyclical growth planning and integrate the new opportunity (secular growth) into the resource allocations, evolving your business planning to appreciate the established with diversity.

This new approach to planning is about driving collaboration across your specialist disciplines, ensuring that each have the resources available to give your new strategy 

* - Escape velocity, free your company’s future from the pull of the past, Geoffrey A. Moore 2011

** - Cord cutting means that a TV viewer can cancel cable or satellite service and receive TV programs via a different option.