If your company is not growing, it’s important to dig deep when looking at market changes. James Quincy, the new CEO of Coke is demonstrating the progressive thinking needed to turnaround his company, which is in decline. In a recent article on PYMNTS.com, Quincy talks about critical information that he is using to understand the declines and then respond to them.
While he is, of course, devising strategies to combat the large consumer trend of moving to healthier drinks, Quincy has researched broader consumer trends and their indirect impact on Coke sales. For example, the fact that people are going to malls less means that they are buying fewer drinks from vending machines. Quincy’s attention to what he describes as the “secondary effect” is the type of market awareness CEOs need to have to ensure long-term growth.
At the other end of the company size scale, I’ve witnessed and worked with startup CEOs who, upon recognizing and yes – acknowledging – market changes, pivoted their business. One CEO I’ve worked with has pivoted four times. One of his great strengths as a leader is his willingness to accept market feedback – in this case negative -- and move on. And the good news is that his Company 4.0 looks to be a winner as he has several Fortune 500 companies as early customers.
My company is currently working with two client CEOs where their existing market is stagnant. They recognize that their firms’ growth potential is limited within their core markets and have hired Chief Outsiders to help them explore new markets. Sometimes an outside perspective provides useful insight.
Other CEOs fail because of their Ostrich Syndrome. You can neither will a market to grow, nor can you stop it from declining. Every day more physical retailers such as Macy’s, J.C. Penny, RadioShack and Payless are closing stores or even going out of business (looking at you, Sports Authority). A recent article in The Atlantic provides insight – beyond just Amazon’s obvious success -- on what happened. Yes, consumers are buying more online (remember the secondary effect for Coke?), but there are other significant consumer trends that affect retail. For example, consumers – especially Millennials – value experiences more than material objects.
What market signs are you missing? Are competitors coming from unexpected places? Are you missing a new market opportunity? I welcome your comments.