It is now more than five years since the start of the global financial crisis. The shocks of 2007 and 2008 heralded what is already one of the longest periods of economic retrenchment in history. While governments, markets and people long for a period of stability and recovery, all must face up to a stark possibility: we may not yet have seen the worst.
That is the main conclusion from our latest study of how high performers are surviving – and indeed thriving – in the new economy.
Of our 1,500 respondents, 83% predict that their market will become more competitive over the next two years. This rises to 91% for our high performers, whose success we have shown to be largely dependent on a deeper understanding of market trends and customer demands.
Our objective is to find out what it is that high performers are doing differently, and set out the lessons that other businesses must learn if they are to emulate them.
Growing Beyond: how high performers are accelerating ahead reveals that the difference between high performers and the rest is becoming more and more pronounced:
- High performers are more outward-looking and focused on the market
- High performers respond smartly to change but, more importantly, respond speedily
- High performers understand what drives cost and what drives value
- High performers engage more with stakeholders and unleash their talent
High performers are ahead with respect to:
Examining how high performers deliver in these four key areas — customer reach, operational agility, cost competitiveness and stakeholder confidence — is an important starting point.
- High performers seek deep understanding of their customers' demands and expectations and are spending more on marketing to attain this.
- They focus on finding new markets for existing products and services. High performers are nearly three times more likely than low performers to generate sales in new markets.
- They plan more carefully when entering new markets. They identify a clear demand for a current product or service, and assess the scale and growth projections of that market.
- They prioritize innovation. Nearly twice as many high performers as low performers generate more than 10% of their sales from products or services developed in the past three years. They focus on incremental innovation of new products for current customers and current products for new markets.
- They understand that the risks of being first to market are beginning to outweigh the opportunities, but that speed of response is always critical.
- High performers are still becoming more responsive, while low performers are reaching the limits of their organizational capacity to respond.
- They understand that consistency can have a market cost that outweights its management value. It can reduce their ability to respond to an increasingly varied and volatile world.
- They adapt flexibly to fast-changing circumstances, by deploying technology, devolving decision-making and enhancing the skills of their workforce.
- High performers are externally focused on value-creation and opportunity. They place more emphasis on customer segmentation and market analysis. High performers recognize that understanding what customers need, what they expect and what drives them is crucial when determining pricing strategies.
- Because they understand their customers, high performers can be more confident about increasing prices.
- They know the difference between eliminating waste and simply cutting cost. They identify the actual organization-wide costs involved in supplying their service or product.
- They focus more on efficiency than on reducing headcount. Just a quarter of high performers have reduced headcount, compared with 43% of low performers.
- High performers seek to make the value they create visible to their external stakeholders and have significantly increased both the scope and frequency of reporting.
- They understand that future success is global and value the ability to lead effectively in an international business environment. They offer their talent opportunities to operate across borders and see access to talent as a reason to enter rapid-growth markets.
- High performers place a greater focus on the individual. They link pay with performance and provide customized development.
- They unleash their talent onto the market by devolving decision-making as far as they can and refine roles and job.
Download the complete report to learn more.