6 things B4B companies do very well
(Reading time - 4 minutes. Check to see if your company is a B4B company?)
Do you consistently want to spring out of bed everyday morning, get excited about showing up to work and make your customers successful?
This is simply what Business FOR Business (B4B) companies will offer your everyday.
In case, you have not read my article on what a Business For Business thinking is all about, request you to invest 4 minutes to give it a read before going any further. It will surely help you connect better with this piece.
After dabbling in the world of business for the past two decades, I have had a chance to work with some of the best leaders, professionals, thinkers, inventors and innovators. It has definitely been a roller coaster. In that roller coaster ride, I have seen more of some and less of some.
The more of some - revenue targets, profit, quarters, annual reports, results, budgets, frequent organisation structure changes, office politics, leaders trying to define culture, uncertainty, appraisal, awards, rewards, restructure, hiring, firing, products and services and now disruption.
The less of some – bond through trust, caring attitude, emotions, living core values, transparency, selfless leadership, meaning of work, guarantee customer outcomes.
Incidentally, the ones listed in the ‘more of some’ side can easily be measured, quantified and appraised. The ones in the ‘less of some’ side of the equation are not easily measured. Vague at its best.
You know what?
In the social era, it seems, attributes in the ‘less of some’ side of the equation is taking center stage. Companies that are able to clearly communicate, amplify and live the ‘less of the some’ attributes are winning and growing.
Companies that are still stuck to the ‘more of some’ attributes are loosing steam, slowly becoming irrelevant and are being left behind. Though they are still able to generate plenty of free cash flows, they are loosing momentum. Maybe dying. And they don’t seem to get it - yet.
At the sametime, companies who have managed to bring ‘less of some’ attributes to the forefront have managed to differentiate themselves in a crowded market place. Despite the disruptive forces all around they just seem to thrive.
They seem to get it. They understand the new rules of the social era where ideas, network and outcomes win. I call these as Business For Business companies.
The ones that exist to make other businesses and consumers successful. In doing so, they galvanise their entire organisation through a bond called 'trust' and make everyone fall in love with the customer.
FOR customer success
WITH the trust of people (employees).
Sounds very simple? Not really. Let’s see what are the 6 rules they follow really well.
Rule 1: They have a strong WHY?
B4B companies have a strong WHY. We all have heard Simon Sinek explain the power of WHY in a very popular youtube video. B4B companies seem to have nailed their WHYs very well.
Why as in - Why do they exist? Why should they exist?
Not some business jargon. But simple words that connect to people at a visceral level. Let’s see some examples.
IKEA - We exist for the idea to offer a wide range of well designed, functional home furnishing products at low prices so that many people around the world will be able to afford and enjoy them.
Zappos – One day 30% of all retail transactions in the US will be online. People will buy from the company with the best service and best selection. Zappos will be that online store. We will deliver happiness.
SAS Institute – Some people see data as facts and figures. But it’s more than that. It’s lifeblood of your business. It contains your organisation’s history. It’s trying to tell you something. We exist to give you the power to know.
Ain’t this simple? Yet, don’t they tell us why these companies want to exist. They want to connect with their customers, employees and stake holders at a deep level. Not just at value proposition, work culture and commercial construct levels.
A WHY that a CEO can easily communicate to one person or to 100,000 people spread across 60 countries. To inspire them, align them and make them fall in love with their customers.
Salaries, bonuses, commissions, stock options, position, power, perks don’t inject meaning in people’s lives. No one jumped out of bed knowing that they will earn $ 37,256.75 that month or had a Senior VP in their title.
Meaning inspires people more than money. People want to help People and feel good about it.
1. Does your company have a strong WHY?
2. Why do you exist?
3. Why should customers care for you?
Rule 2: They have the customer in the center of their universe
B4B companies put their customers bang in the center of the business model. They are completely obsessed about their customer.
There are many companies out there who claim to be customer centric. That’s just marketing and brochure talk. They are still self centric. For example, let’s take banks.
Internally all the banks know that they are product centric. Retail banking, credit cards, loans, wealth management, forex, money transfer are all different departments with different targets. From top to bottom, metrics are run by products. Incentives and bonuses are separate for various product lines. Technology systems are built around products.
Yet, they claim to be customer centric. Bullocks. This is a self centric model where the company is in the center and the customer is at the edge. Mostly frustrated and numbed out.
Let’s see who puts customer bang in the center of their universe (business model).
Alibaba - They are obsessed about connecting wholesale traders - buy & sell.
GE Digital - They are obsessed about assets (equipments) owned by their customers
Uber - They are obsessed about connecting car drivers to people who need a trip
IKEA - They are obsessed about customers who want beautiful low cost furniture
Amazon - They are obsessed about helping people discover and buy things online
These companies design organization structure, technology, processes, compensation and other stuff around their customers. Period.
Customers are bang in the center of their universe. When you structure your business this way, you can sense and respond to what the customer really need and want much faster than your competition. You center of gravity is quite low. CEO is few steps away from any customer.
You are truly set up as a business for business.
Rule 3: They put customer success before profits
This rule is contrarian. You might ask how can we put customer success first before our own profits? That's insane.
You know what, for the past few decades, we have gotten away by selling products and services and asked the customer to take care their own success. We never bothered about customer outcomes. We left them on the highway.
In technology business, we have sold billions of dollars worth of products and services to our customers. Hardware devices, network equipment, storage, data centers, connectivity, software licenses, maintenance contracts, costly implementation services and many more.
Did they all guarantee atleast one to one business outcome? Quite doubtful. We took care of our revenues and profits first before ensuring customer outcomes, if any. That era is over.
We are now moving into the new world of ‘consumption economics’. We are rapidly moving into ‘everything as a service’ world.
It's not new to see follow pricing model at play: Pay-per-user, pay-per-transaction, or pay-per-unit rates. The customer only pays for what they consume. There is even talk about revenue-sharing or gain-sharing arrangements. These pricing models mean that the customer pays much less up front, sometimes nothing at all. The supplier only gets to bill the customer when the customer utilizes the product or achieves an outcome.
Here is a fantastic example. General Electric’s 140 year old GE Lighting business has been rebooted and modernised to take advantage of new technology and has launched a all new energy business called Current.
GE is using digital technologies to transform their old business model of making money by selling products and services to now selling ‘insight as a service’. GE has made huge investments to move towards customer success by investing its profits into the future.
Your business may soon find that a significant percentage of your revenue will come from service subscriptions and transactions, which ultimately are closely tied to customer outcomes.
1. Are you prioritizing customer success before your profits?
Rule 4: B4B firms create more value than they capture
Value is a term that’s thrown around quite a bit these days. All day long we talk about compelling value proposition, value gap and value equations. But let’s understand the difference between value creation and value capture.
Value creation: The performance of actions that increase the worth of goods, services or even a business. Uber helping you find a car when needed, AirBnB helping you find a place when you travel, Alibaba helping traders buy and sell, GE digital helping customers optimise asset performance are all examples of value creation.
Value consumption: The performance of actions that decreases the worth of goods, services or even a business. Microsoft in the initial days helped to revolutionize the personal desk top eco-system and created a rich ecosystem for developers. Once growth stalled, they decided to consume more value by making profits out of their big hit products such as MS Office and SQL Database. They consumed value.
Take Enron Corp., for example. Enron management gradually found it easier to book profits with mark-to-market accounting than to continue to develop innovative solutions for their customers. In the process, Enron’s business model lost its competitive edge, and its management got sucked into relying on fraud to capture value. They too consumed value.
Pharma companies want to tweak an existing molecule, patent it and milk it for next 20 years. That to me is consuming value.
DELL is, for better or worse, a classic example. The huge value it created by utilizing supply chain efficiencies (‘Direct2Dell’) to drive cost down of personal computers was marginalized as it hung to legacy models and techniques.
As Dell’s growth stalled, the company gradually consumed more and more of the opportunity for themselves, and innovators moved elsewhere - the Mobile devices.”
Most of the companies fall into this trap. In the initial days, companies create more value than they extract from the market. They come up with something unique that fills a market gap and offer more value. Then they run short of ideas or simply lack a higher purpose. Or the WHY.
They end up sucking all the value and leave behind a black hole.
It seems, these days, the value is going into the paychecks of CEOs, Executives and share holders, instead of back to the customer (or the society).
Companies such as Amazon, Tesla, Alibaba, GE, Google, Microsoft are all stumbling upon each other to disrupt themselves and create more value to their customers than extract. This will ensure that they continue to stay relevant, be innovative and be admired by their customers.
B4B companies create more value than they consume.
1. Is your company creating more value than it extracts?
Rule 5: What is you attitude towards your people?
Are your people assets? Or simply a human resource?
B4B companies have a world view that people are assets. A source of ideas who can inspire and be inspired to do great work. They understand that customer value is created at the interface between employees and customers.
In the value zone.
They focus on how to energise this value zone so that magic happens. If the value zone is energised, more value is created. Else it fades away.
When you build a business for other businesses to succeed (B4B), you build it
WITH your people.
B4B companies are in no hurry to hire people. They spend a lot of time in hiring people. They make sure that they don't hire just for skill but for core value alignment as well. Once hired, the world view is that people are assets who can continuously learn, unlearn, deliver great work and bring success.
It is backed by a philosophical idea. Not by quarter results.
Haven't we seen companies hire in thousands and fire in thousands? These reputed brands hire for skills and fire for skills. It's business. Purely commercial. Their world view is people are resources. To be added and subtracted.
Such companies remain a B2B company filled with human resources. Everything a transaction. Tied to quarter results.
How can you exist for your customer success and yet have employees who show up to work out of desperation (pay check), dis-engaged, uninterested, lack meaning and simply not motivated to do great work?
1. How does your company view people? An asset or simply a resource that can be added or subtracted?
Rule 6: How do you bond as a company?
Do you bond, as a unified tribe, using the invisible glue called trust? Or through contract (capability, skills, position)?
Can you count on your boss? Peers? Teams? And leaders?
Do they have your back? And do you have theirs?
Do you feel safe? Or you fear them?
Do they see you as a person who can do meaningful work or a Job description that is supposed to deliver results every quarter?
Leadership sets the conditions that can make trust and cooperation thrive. Trust and cooperation are feelings which result from the environment we are in. The only way trust can be built is when you are willing to sacrifice FOR someone else. Share both glory and defeats with others.
B4B companies bond people by creating a trusting environment. Leaders lead by example and ensure people exist for the people's success.
In the era, where performance appraisals are crumbling (symbolising the fall of industrial era bell curve) there should be better way to lead and manage people.
It starts with a worldview that people are assets and the uniting bond across the organisation is trust. Not contract.
1. Is your organisation bonded together by trust? Or contract?
2. Do your boss, leaders, peers, teams have your back? Do you have theirs?
When all these 6 rules are followed, your business approach moves away from Business to Business and becomes a true blue Business for Business company.
Solidly built FOR customer success WITH your people bonded through TRUST.
Isn't this the holy grail the world is looking for?
About Agility Nexus
Agility Nexus (www.agilitynexus.com) is a Sales and Business Consulting and Coaching company serving business leaders in Technology Industry to accelerate revenue generation. We consult, coach, train and solve problems at the intersection of marketing and sales. We blend various strategies including Emotional Intelligence to help sellers better connect, engage with customers and offer great customer experience.
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