Finding and building on the hidden resources you’ve developed in the course of business – starting with what works – is a great source of growth, says Andy Bass
How do you double the value of a hard-boiled egg?
A young woman in Africa was selling hard boiled eggs to construction workers. She discovered that when she bundled the eggs with a tomato and herb salad, which cost almost nothing to produce, what she was selling was no longer just an egg, but lunch. Now, she was able to charge more than double the price of an egg for something that cost far less than two eggs to produce.
I heard this story from advertising legend Rory Sutherland, Vice-Chairman of Ogilvy. He included it in his foreword to my book Start With What Works: A Faster Way to Grow Your Business. It neatly captures the idea that if you build inventively on what you’re already doing, you can often create amplified value.
The idea of starting with what works might seem like common sense. After all, why would you start with what isn’t working? But isn’t that exactly what we habitually do? We start with problems. In contrast, how often have you held a meeting to discuss what is going well in your business that you could profitably amplify? That way, you might find answers that have been inside the business all along.
I’ve come to believe many businesses are overlooking hidden gold. This belief rests on three sources:
- My consulting experiences, which have shown me how often the answers were already inside the client organization.
- Stories from turnaround executives who habitually ask employees how to transform apparently resource-starved companies.
- Examples of successful businesses who have identified and exploited hidden assets, some of which I’ll talk about below.
Why do leaders overlook the value of the resources they have already?
I’ve observed a strong tendency to seek answers outside the business: it could be a ‘rock star’ hire, a fancy new system, an acquisition, or industry ‘best practices’.
No doubt fresh talent, up-to-the-minute technology and new methods can be important. But they also add complexity and risk, not to mention extra expense.
One reason people look outside too quickly is that on a day-to-day basis, managing inside the business mostly involves problems. This can lead to a wasteful conclusion: if problems are inside, solutions must be outside.
Another reason is that we progressively discount the value of the familiar, preferring the new and exotic – the word exotic literally means ‘from the outside’.
And it’s just tempting to think that a magic bullet will transform everything. I suggest the following to my clients: ‘Before you go in search of magic bullets, look inside at what you’ve got going already. Tapping into that can bring you faster growth, with lower risk, and lower cost. You just need to take a different point of view. ‘
Here are three of the most powerful Start With What Works principles to help you find a new perspective.
1Create more value by recombining existing resources
One of the highest profile technological races is the one to produce autonomous vehicles. Daimler are engaged in this race, but they’ve approached things in a different manner from Silicon Valley competitors. They produced automated (not autonomous) versions of their trucks, fitted them with snow ploughs, and programmed them to keep the runways at Frankfurt airport clear in the winter.
This is not one of those ‘moonshots’. It deals with one restricted situation. The trucks are driverless, but not fully self-driving. They don’t have all the sensors and intelligent decision making to adapt to any road traffic situation. The elements Daimler used are things they had access to already: trucks, GPS, digital maps and existing automation know-how. But they are out there now, operating without drivers in the cab, moving Daimler into services, creating real-world learning and building a reputation for high-uptime driverless solutions.
Daimler is also pursuing fully autonomous cars. But this move has allowed them to build a track record and demonstrate actual business results.
Just because the development is incremental doesn’t mean the effects have to be. Uber used similar thinking to upend the taxi market globally. So don’t be mesmerised by the idea of pursuing ‘moonshots’ – just getting into orbit can be transformational (in fact, orbital spaceflight has to date created far more value than travelling to the moon).
2Reverse engineer yourself
An aim of reverse engineering is to identify reusable components. For example, a software developer looks at the behaviour of a system and figures out what must be there in order for it to work. They then isolate and reuse those elements in new ways. Similarly, you can look at a business to identify resources which can be reused to produce higher value.
Ocado, founded as an online supermarket, never operated retail stores, choosing instead to deliver direct to customers’ homes. As Ocado grew, it developed the hardware and software to support its operations. Only later it realised that this infrastructure was a huge asset, and packaged it up in the shape of the Ocado Smart Platform. Through this platform, Ocado serves supermarkets across the world, including Morrisons (UK), ICA Gruppen (Sweden) and Kroger (USA). Reconfiguring from a UK grocer into a global technology provider has given Ocado dramatic growth prospects.
Take a fresh look at what you do. What underlying capabilities are presupposed? Could any of those capabilities be reused in higher value applications?
3Bring your customers inside
While most businesses talk about being customer-centric, many fail to appreciate just how valuable their customers can be. A simple example: lots of employees never meet customers. When we’ve brought customers into Town Hall meetings to talk about their experiences, the effect has always been galvanising (and discernable in metrics from on-time delivery to employee engagement).
LEGO went even further than inviting customers inside, and actually recruited some. Previously the company had gone to great lengths to hire the best designers it could find. Being LEGO, they had access some very good designers indeed. The problem was these people didn’t ‘get’ LEGO. They designed brilliant things that LEGO users weren’t interested in.
Then the company realised they had an under-appreciated resource: a sophisticated adult user community. Maybe some of the members happened to be designers? Some were, and they were recruited, designing winning products.
LEGO invests considerable effort in its user community, but many businesses are overlooking similar opportunities.
Starting with what works can make you a formidable competitor
Think of some of the most written-about companies in the world, like IKEA, Southwest Airlines, Toyota and Apple. They are subject of voluminous case studies. Every Business School student studies them. Many people have tried to copy them, yet they continue to thrive.
They are hard to copy because they have developed their own unique ways of doing things. (A friend of mine recently travelled to Japan to study lean manufacturing at Toyota. Some of his instructors had been doing lean for 40 years. You can’t capture all that accumulated expertise – that community of practice – in a few books and training courses.)
Imagine being so hard to copy that you can be a Business School case study but your competitors still can’t match you. Finding and building on the hidden resources you’ve developed in the course of business – starting with what works – is a great source of growth, it’s also a great source of sustainable differentiation, and a great way to stop would-be imitators from eating your egg salad.
Dr Andy Bass helps businesses grow faster by using resources they have already. He is author of Start with What Works -a faster way to grow your business published by Pearson.
