Are NOT companies!

Recessions do NOT Treat Your Customers Equally!

Find and Develop the Niches that are Growing During the Recession

Cut Expenses AND Develop Growing Customer Segments

Take telephone system operators as an example. They have severely cut capital investments in their mainstream operations. But at least two small niches hidden in that huge infrastructure are growing: High speed core networks and broadband access networks.

The 40Gb and 100Gb networks are a very small part of the systems today. Only a handful of them are in operation. But they are projected to grow by 50% per year over the next 5 years! The stimulus package in the US includes $7.5 billion for broadband access network development.

If your business enjoys a strong market share in the legacy networks that will be replaced by the high speed core networks or the broadband access networks, you are in trouble. Cut expenses severely in any part of your business that depends on those old networks. But at the same time, find and develop relationships with the small number of people creating those new networks in the system operators and their suppliers.

The key is perception. Do not think of Verizon as the customer, think of the small teams of people in Verizon who are installing the new networks as the customers. Then we can help YOUR people to develop the skills and processes that they must have to find those customers in those niches and connect with them as one would connect with customers in emerging or growth businesses.

Usually the mature businesses in a company generate most of the cash from the biggest revenue streams. Executives, investors, and lenders love mature businesses. They are big, predictable, and profitable. That leads to the managers of the Cash Cow businesses to a dominant position in forming their companies' policies. The actual cows cannot do that.

It takes a savvy business person in the executive suites, like Michael Splinter, CEO of Applied Materials cited in our Recession Strategies page, to balance the opposing needs of the variety of strategies needed to get the necessary performance across a range of mature, growing, and emerging business segments. Without that balance, it is easy to see that a dairy would fail as the mature cows die. The same is true of mature businesses of all kinds. Maturity is only temporary.

Overconfidence in Knowledge

"How could we get this big and strong if we did not know what we are doing." We hear that chanted as a mantra in many mature businesses. It even fosters the belief that their knowledge extends to emerging and growing businesses.

As an example, we encounter many situations in our work in which travel restrictions have been implemented across the organization. It is easy for the executives to institute travel restrictions, and it can be easily demonstrated that travel expenses are down as a direct result of the restrictions.

A little learning on top of all that knowledge would reveal that travel restrictions imposed across a company because its mature businesses are in the dumper will kill the emerging and growth businesses that will become the mature businesses of the future. Killing off those businesses means the company will fail as its mature businesses pass on from maturity to decline.

Learning companies defeat knowing companies consistently. Is anyone paying attention to that? The PC businesses and the workstation businesses were early in their learning phases when took DEC's business away. DEC was the paramount knowing organization in the mini-computer businesses. Think of the hundreds of other examples like that. Is knowledge the valuable asset, or is it learning? We believe it is the learning, and it must be kept alive and moving forward.

We help clients to create learning organizations with their focus on winning customers.
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