Every company wants to make more money, and Rita Gunther McGrath’s new book, “Marketbusters: 40 Strategic Moves that Drive Exceptional Business Growth,” suggests some ways to do just that. Authors McGrath and Ian C. MacMillan define a “marketbusting move” as an action taken by your firm that changes the game to deliver markedly superior performance. A marketbuster might be measured by a two percent change (gain or loss) in market position, or by annual growth in sales or shipments of 10 percent or more, charted over at least two years and based on an innovative new entry.
The book gives techniques to identify opportunities and tools to profit from them. Hundreds of case studies, including several drawn from Princeton-based firms, illustrate the whys and wherefores of the advice. Dishing out some advice on how to make these changes happen in small firms or large corporations, McGrath suggests seven rules for making a marketbuster work:
Agenda: Taking time and attention. “Setting your agenda to create focused attention on marketbusting should be your top priority. If you aren’t paying that level of attention, neither will anyone else in the organization.”
Norms or organizational values: “Norms that reward challenging assumptions are critical to the success of a marketbusting strategy. You want to avoid two cardinal sins: first, the sin of disagreeing with an observation or fact and saying nothing; and second, the sin of not actively participating in the debates that will reveal the correct information. And without norms that stress personal accountability and follow-through, you waste a whole lot of time on following up and checking on people.”
News, or the information collection and communication processes. “For marketbusting, leading indicators (often fuzzy warnings of what is to come) are critically important because they give you indications of whether you are heading in the right direction or are about to plunge over a cliff. Know how you will get meaningful information.
“As for communication, the CEO of Charles Schwab and Company, David Pottruck, banks on having to do a lot of repetition. He suggests repeating the message 700 times before assuming that the organization has gotten it.”
People Structures and Processes. “Will the new idea sustain the way you do business right now, or will it possibly cannibalize or weaken the existing business? The more it threatens the people in the existing business, the greater the value in locating the marketbuster team in a separate organizational structure.”
History. “Like the tail of a kite, an organization’s history can be enormously important for its stability.”
Leadership. Among the leadership questions listed, have you thought through where you will personally need to intervene to clear paths for your people?
Resource Allocation. “A good rule of thumb is that when making allocations to new business opportunities, you need to give them disproportionate resources relative to their size. A fledgling business will need more intellectual power, more design skills, and more technology, proportionately, than a larger, established business.”