In my last article, “The Growth Handicap: Cultural Competency and Strategic Readiness,” I suggest that many U.S. corporations are operating with significant handicaps because they aren’t aligned with today’s consumer landscape. Their vision, mission and values fail to deliver across the board.
In research to help diagnose companies’ hindrances to growth, and to reveal causes of share declines in markets across the country, I frequently review annual reports and 10-K reports. I also engage in explorative conversations with executives. These talks and documents describe specific details about companies’ strategic foundations and their competitive advantages. Often, these include engaging and building consumer relationships and loyalty, delivering excellent customer service, providing easy and convenient access to their products and services, and delivering value by positively impacting consumers’ lives and lifestyles. Long lists of strategic assets describe how these contribute to meeting these goals. By this I mean operations, technology, people, products and services and their delivery.
The reality, however, is that few companies are planning, developing and implementing strategic assets with acknowledgement, understanding and the competence to be relevant to the total U.S. consumer marketplace.
Strategizing for the Majority Minority
In general, it can be said that corporations’ strategic assets are mostly relevant to two-thirds of U.S. consumers. As a result, companies are finding it hard to achieve established growth goals because their strategies, operations, technology, innovation, people and marketing don’t consider, speak to or deliver on the specific needs of the remaining one-third of the U.S. population. I contend that investing on strategic assets that only take a company two-thirds of the distance is not a sound growth strategy or investment.
Yet companies continue to think and operate with a limited view of today’s marketplace even as the “core” market on which they focus continues to shrink and age. Is it really possible to win with companies’ current approach in markets like California, Texas, Arizona, Illinois, Florida, New York and others states where over 300 counties are already majority minority counties?
I’ve spoken to companies losing market share or where growth is stunted in the above markets, which are just now realizing they may need to do things differently. All the while, their category managers, merchandisers and retail operations teams either have no idea how to be relevant and/or they outright refuse to adapt to the marketplace around them for fear of alienating their “core” customer when the core customer profile has changed dramatically in these markets.
I’ve talked to other companies that, in their quest for growth, are innovating and testing new products and services in the country’s largest markets where Hispanics, African American and Asians represent more than half of the population. Yet, when asked about how the market tests and research results turned out among Hispanics, Asians and African Americans, they respond emphatically that their R&D tests and market research wasn’t an “ethnic” project.
This is the kind of disconnect at work in corporate America today. In this age of globalization, is it really possible that companies are successfully taking steps to expand into foreign markets when they haven’t yet cracked the code on the largest multicultural market within its own borders? Fifty million Hispanics or 100 million multicultural consumers are big numbers no matter how you look at it.
Connecting Corporate America’s Disconnect
If you’re ready to improve your financial performance by expanding your organization’s ability to think and act globally within U.S. borders, here are the six steps I recommend to get help your organization start thinking more strategically about total market growth:
1. Establish the need in the CEO-Suite
Speak to performance goals which are dependent on the country’s total population of 308 million not 208 million people. The CEO must communicate and model a total market success vision and convey the change as an imperative critical to achieving financial performance.
2. Senior leadership must help re-define the U.S. consumer market
The organization must adopt a broader view of how the U.S. consumer market is defined, and how it will be addressed vis-à-vis the company’s business model and performance goals.
3. Build a cross-functional, working team of high level stakeholders
All areas of the organization should participate in the due diligence process and must be held accountable for delivering value to all customers to improve financial performance.
4. Charge stakeholders to aggressive knowledge-building
Stakeholders must acquire the necessary awareness, knowledge and skill sets to meet total market requirements so they can identify the relevance gaps, implications, and develop recommendations for current and on-going market relevance.
5. Develop action and change-plans across all areas of the organization
With senior management input, stakeholders must act and plan across all areas of the organization so that area leaders can implement their respective solutions, including educating and developing their teams.
6. Task stakeholders with implementing solutions
Stakeholders must implement approved solutions in a timely and methodical manner, with established metrics and milestones that are reviewed quarterly, semi-annually, and annually at appropriate levels.
It’s important to keep in mind, that transformative business readiness to achieve total market success is a process. It will happen in pace with top leadership’s ability to create and maintain appropriate momentum, as well as, its commitment to tie rewards to strong results across all consumer segments and ultimately to financial performance.
By Terry J. Soto, Author of “Marketing to Hispanics A Strategic Approach to Assessing and Planning Your Initiative” and President & CEO of About Marketing Solutions, Inc. a strategy consulting company providing transformative business readiness and strategy consulting for profitable and enduring total market success. Contact Terry at 818-842-9688 or by email at firstname.lastname@example.org – www.aboutmarketingsolutions.com