Sometimes the Answer is Right There in Front of You
Posted on 28th March 2017
Welcome to the Business Empathy Forum and thank you for your visit. In this post I would like to highlight several key concepts from ‘Edge Strategy: A New Mindset for Profitable Growth’. This insightful 2016 book by Alan Lewis and Dan McKone explains how firms can innovate profitably around the ‘edges’ of their businesses, rather than necessarily gambling on disruption and reinvention. The authors encourage us to slow down and think: how can we squeeze more profits from our existing assets, from the opportunities that are close by?
Edge Strategy, Innovation, and Taking the Time to Think
First, a bit of background on edge strategy. Lewis and McKone are business consultants, and they acknowledge how important it is for firms to focus on their ‘core’ business, the things they do best. At the same time, in a fast-moving and competitive world, successful firms also need to scan the horizon constantly, watching for new product, niches, and opportunities. The clever challenge they present is for firms to re-think how a firm’s existing products and services are perceived by the marketplace: they ask firms to think about their offerings through different ‘lenses’, so that value can be captured and leveraged in new and profitable ways without facing disruptive change.
What are these lenses or ‘edges’ that Lewis and McKone write about? There are three. One they call product edge: how might we tinker with an existing product or service so that it generates more revenue or becomes attractive to a wider market? Customized accessories may be one approach here, or leveraging the ‘internet of things’ to offer services linked to specific products. A second perspective is the journey edge: leveraging empathy and customer insight, firms capture value by expanding or adapting their role in the customer’s journey with their product. A pleasing example from my adopted home of Portugal might be the vintner who expands into rural tourism and wine tastings, and then classes for aspiring sommeliers.
Finally, the authors describe enterprise edge: this is about unlocking hidden value by leveraging the enterprise and its assets in new and clever ways. One example here might be firms that create enormous customer databases in the normal course of their businesses, and then sell access to those databases to other firms. In another example, IBM blazed a path decades ago when it moved out of computer hardware and switched its focus to IT consulting.
Tying the concepts and the many examples together, a salutary point is made: it is certainly important to keep watching the horizon for ‘the next big thing’, but we mustn’t overlook the opportunities that may exist right under our noses, at the ‘edges’ of our businesses. I encourage my clients to ‘Slow down and think!’ if they want to be innovative, and I encourage you to spend some time thinking about the product, journey, and enterprise edges of your business.
Good luck, and until next time…