What should lead your business decision making – Your product, your market, or your ideas?
In today’s ever-changing business landscape, it can be challenging to make the right decisions for your company. Market dynamics are non-stop, and what worked last year is unlikely to work this year. So, what should lead your business decision making? Your product, your market, or your ideas? Let’s explore this question further by looking at a real-life example.
An I.O.T – telematics company makes devices to communicate changes in state such as water level, temperature, gas concentration, and sound/volume shifts, which are used in pipelines, cabling, and air. The product is offered as a service, with I.O.T advice and software to read and evaluate what’s being measured. However, this company is facing threats from competitors as barriers to entry fall, and opportunities in the market as client demand increases.
Product or market?
The founders of the company had different opinions on how to get ahead and stay ahead. Founder A wanted to add more features and capabilities to the suite of devices and software, in other words – product-led innovation. Meanwhile, Founder B wanted to introduce new products for different markets or use-cases, increasing the suite of devices and software, ie – market-led innovation.
However, neither approach was successful, both led to a series of investments in both product and market innovation, which confused employees, and drove poor performance. The founders’ ideas were based on their experience in product development and market engagement, with Founder A obsessing over competitor products and Founder B obsessing over competitor marketing and sales activity.
So, what’s needed to get it right? It’s essential to understand what business you are in by defining it in terms of clear customer segments, the problems you solve for each of them, and finally, the experience your customers want from you. This is the truest definition of customer-centricity, which is different from product or market-centricity.
This approach puts you in the forefront of the earliest changes in the everyday status of your customer. It’s the source of changes to how you engage (market-led) and how to change the product (product-led) decisions to get ahead and stay ahead. By focusing on your customer’s needs and preferences, you can make informed decisions that will keep your business relevant and competitive.
Pavlo discussed this in a recent Money Show podcast.
When making business decisions, it’s essential to focus on your customer and their needs, rather than solely on your product or the market. By adopting a customer-centric approach, you can make informed decisions that will keep your business ahead of the curve and set you up for success in the long run.