Redefining Growth Leadership in 2024
Senior leaders must embrace these 5 strategies to unlock growth in a shifting business landscape.
The good news is that 2023, a very challenging year for businesses, is over. The bad news is that 2024 may feel a lot like 2023, with many of the same barriers to growth. That means senior leaders should think bigger (about go-to-market innovation and future-back strategies), bolder (about brand-led transformation and new business models) and more creatively (about driving organizational capacity for change).
Most of the senior business leaders I know were happy to see the back of 2023. The challenging combination of macroeconomic and geopolitical uncertainty, plus relentless technological advancement, created significant barriers to growth. Heading into a new – and hopefully less turbulent – year, growth remains the focal point for senior business leaders across the industry.
C-suites are being pressured by investors and capital markets to find new sources of revenue and new ways to increase customer loyalty. Every part of the business is charged with identifying new pathways to growth. At the same time, every dollar invested is being closely scrutinized for its impact on overall performance.
For all the market uncertainty and competitive intensity, however, it’s worth remembering that disruption is born out of turbulent times. In that spirit, we offer five key ideas for unlocking growth in 2024 and beyond.
Theme 1: Driving Value Through Go-to-Market Platforms
Given customer expectations today, it’s no longer enough to have a great product or service. You must engage customers and demonstrate your relevance to their lives outside of simple, one-off transactions. Platforms have become critical because “Use journeys” have become more important than “Choose journeys,” as my colleague Ted Moser writes in his new book, Winning Through Platforms:
“In the Choose journey, customers explore their needs and options, assess their final choices, and transact. In the Use journey, customers use the products and services they have accessed, then eventually decide whether to access them again – and if so, from whom.”
Platforms are for the Use journey in the 2020s what websites were to the Choose journey in the early 2000s – the primary way companies engage with customers to deliver satisfying experiences and execute their growth strategies. They are powerful because they enable companies to carefully observe how customers use their products and explore other areas of interest. That creates momentum on the Use journey and provides data the company can use to add features, shape superior offers, and drive increased uptake.
Platforms are known by many names – apps, super apps, hubs, portals, clouds, suites, exchanges. Whatever they’re called, the platforms convert functionality into valued customer experiences, which lead to renewed brand relevance and, ultimately, market leadership. They also signal advantage to investors and prepare a company for convergent competition.
Platforms are no longer purely for tech giants or ambitious, well-funded start-ups. Consider how pharmaceutical companies are creating hubs and communities for specific types of patients, with content and connections to help them manage their conditions and lead healthier lives. Or how wealth managers and other financial services firms, in the face of product commoditization and converging competition, have reoriented their offerings and experiences around customers’ goals.
Companies can no more “pass” on deploying platforms than they could “pass” on having a good website. And if they choose only one, it should be a platform.
Theme 2: Utilizing a Future-Back Approach to Rethink Growth Strategy
Today’s markets are too volatile to leave growth to traditional cycles, which are not nearly as consistent as they used to be. In fact, growth can accelerate and amplify at any turn. That’s good news because many companies that experienced declines in the last year can’t wait for the next naturally occurring growth cycle to occur organically. Firms that aren’t prepared for the next growth cycle may miss their chance to accelerate growth.
A future-back approach has helped many firms envision new growth trajectories. Firms that struggle to unlock growth or get leapfrogged by disruptive competitors often make the mistake of expecting patterns of past market behavior to repeat in the future. Obviously, senior leaders know markets keep moving, driven by shifting customer behaviors and evolving societal trends. That’s why companies must invest time and resources in figuring out what’s over the horizon.
While it’s impossible to predict the future, firms can leverage deep customer insights and formalized approaches to exploration to identify probable developments and their preferred outcomes. Indeed, our recent research found that a leading barrier to increasing innovation is the lack of a long-term planning process. Asking tough questions – Why hasn’t this innovation been tried before? Are we best positioned to deliver a new type of offering? What advantages and disadvantages do we have in the market? – is as important as generating new ideas. The answers to these questions will help define the key capabilities and innovative offers necessary to lead the next growth cycle.
Theme 3: Accelerating Business Transformation Through Powerful Branding
Unlocking breakthrough value often requires transformation in the form of rationalizing the portfolio, realigning the organization, or digitizing operations. The struggles to realize full value on transformation investments are well documented. Less appreciated is the unique power of brands to increase the odds of transformation success.
As portfolios of products and services are redesigned and new experiences created, thoughtful branding can drive adoption and engagement, among both customers and employees. Used properly, brands can establish a new frame of reference, highlight a clear and compelling purpose, and identify the ways in which a company can uniquely deliver. Internally, branding can inspire change by giving employees the motivation to get out of their comfort zones and contribute to important transformation initiatives.
In accelerating growth through business transformation, senior leaders must ask what role their brand can – and should – play. Understanding how brands and a company’s purpose are perceived in the market is a vital first step. In some cases, brands may need a refresh to match updated offerings. In other situations, brand equities can extend effectively into new categories. In either case, careful planning and market insights can help senior leaders find the right way to put the brand to work.
The regional casino operator formerly known as Penn National Gaming aimed to disrupt a sector undergoing great change. Facing an inflection point in its business – thanks to technology advancements, expansion of online gaming and rapid growth via acquisitions – the company set out a bold transformation agenda to lead the gaming and entertainment industry into a new era.
Senior leadership decided it was time to redefine the corporate identity to reflect its growth beyond casinos into omnichannel entertainment. The rebrand created stronger connections with consumers, employees, investors and partners, which led to more support for the broader transformation effort.
Theme 4: Rethinking Business Models to Find New Ways to Make Money
In seeking new pathways for growth, many companies default to product and service extensions rather than exploring entirely new ways to generate revenue and engage customers. We think the latter approach – the development of new business models – is the better option in 2024. Why? Because that’s where the uncommon results come from.
Identifying new business models requires a deep understanding of the value chain – where and how is money being made today, where the biggest pain and friction points exist for customers and which assets can deliver more value. These insights point the way to value-added services that will resonate with customers, versus mere product wraparounds.
A major US consumer products retailer not only remained relevant but delivered strong growth by expanding from basic tech support capabilities into a subscription-based total tech support for home entertainment and productivity, building on the strength of its expert service capability Customers love getting direction on the best system for their needs and investors love the margins of the higher-end services.
Subscriptions have been the most prominent examples of new business models in the past decade. Consider how The New York Times’ expansion of its gaming offers has led to significant user growth for one of the oldest media brands around. Indeed, some observers joke that it’s basically a gaming business that does news on the side.
Another example – acquisitions: The build, buy or partner question certainly applies to new business model development. Every firm should consider a wide range of options.
Theme 5: Building a Business Reinvention Capability to Always Be One Step Ahead
Whatever lingering goodwill brands created during COVID is long gone. The loyalty bump from that era has been lost to rising prices, increasing competition and changing behaviors. Current market realities have placed a premium on the ability of companies to drive change effectively, repeatedly and in line with big-picture business objectives like growth.
Because they know change and disruption are inevitable, companies must learn to disrupt themselves – building new offerings and experiences in line with changing customer needs, tearing down to refocus and then reinventing again.
The legendary toymaker LEGO underwent a stunning transformation to become the “Apple of Toys.” Facing bankruptcy, new leadership formalized its approach to innovation while remaining focused on its core product – the humble brick. The company encouraged customers (both kids and adults) to share feedback and ideas for innovation. Its adoption of “full-spectrum innovation” transcended individual product lines and revealed potential new markets. And it overhauled the culture of its design teams to promote profitable innovation. Even in the age of immersive video games and pet robots, LEGO has delivered impressive results, in terms of both bottom-line metrics and customer engagement, even passion.
In a turbulent, hyper-competitive environment, this capacity for reinvention needs to become a core competency, as well as a cultural attribute. Establishing a business reinvention capability, distinct from the commercial business, will help cultivate a disruptive mindset and the specific processes and skills necessary to drive reinvention. Those capabilities include methodologies for reviewing portfolios and allocating assets, market scanning and sizing, and innovation labs with strong processes and clear criteria for advancing ideas and experiments through product development.
Self-disruption is never easy but it’s necessary for market leadership. To get ahead, most businesses need to step up their game in terms of reinvention.
Disruption remains the only constant for senior business leaders, the one factor they can rely on year over year. And 2024 will offer plenty of it. Organizations that view market threats and disruption as an invitation to reinvent themselves will have a distinct advantage in establishing the mindset and capabilities they need to win. The journey starts with rethinking what’s possible, refining strategies and establishing platforms as a foundation for long-term growth. Organizations can advance by reinforcing their brands and retooling key operations, at which point the process of reinvention naturally begins again.