As much as executives have to manage what’s going on inside a company, external developments and the environment at large are at least as important, if not more. If being in business is all about developing and delivering products and services, it is the marketplace (including customers and competitors) that makes this effort relevant. Think about it; in the absence of a customer need for a particular product or service, businesses really don’t have much to offer. Similarly, the presence (or absence) of competitors can also determine whether or not a company has a meaningful market opportunity. This reality should be a humbling reminder for all executives.
Successful business leaders know that it’s critical to pay close attention to what’s going on outside of their company; committing at least 50% of their time to keeping a close eye on the external environment. This includes monitoring things like customer preferences and demand levels, competitive developments, and emerging trends on a number of fronts, including consumer behavior, product development, regulatory matters, technology, and economic conditions. Staff members at a less senior level might think that these areas don’t have much to do with “making the product”, but in fact, it is the marketplace that should drive a company’s internal efforts. Afterall, what is the value of a product or service that no one wants, is obsolete, or readily available through multiple sources?
In this series, we have already considered the importance of a number of skills, including, risk management, generating results, and communication. Here’s more about why successful executives understand the importance of integrating an external focus into their perspective.
Where it Goes Wrong
Companies have a tendency to get caught up in internal matters, including roles, staffing, and “the way we do things around here”. Another area where businesses often spend a lot of time (and in many cases, too much time) is in contemplating the products and services that they deliver, particularly when technology is involved. Although having great products and services is important, the level of effort in this area can at times far exceed what is actually required, often due to the natural passion so often associated with invention, as well as this area being at the core of how many businesses were founded. Couple this with attention grabbers such as personalities, politics, and other people related issues and the risk of distraction from what really matters can soar.
When business leaders spend too much time focusing on the company and don’t pay enough attention to the external marketplace, they run the very real risk of the business veering off course and becoming out of step with the needs and expectations of customers. In addition, less attention is paid to competitive and other market developments, which can result in displacement of position, as well as a decreasing relevance to customers. And make no mistake, this can happen quickly!
Learning how to take a balanced perspective, including both internal and external viewpoints, takes practice and can be a significant shift from that of less senior roles, where the focus is typically more internal. Here’s how to start developing the ability to have a greater external focus:
- Understand the meaning of “industry”. An industry is a segment of the economy, where a company operates in its broadest sense, and is typically considered on a global or continental level. Although some might ask “how does what’s going on half-way around the world impact my business?”, it actually does, particularly in terms of consumer and technological trends and developments. Learn about the industry in which your company operates and monitor developments on a regular basis.
- Understand the meaning of “market”. The market is the next level down from the industry, and often encompasses the area within which a company operates on a national or regional basis. Closer to home, developments are very relevant, particularly in terms of competitors and customer preferences. Within markets, companies can chart an expansion strategy. Consider this in the context of your business.
- Articulate the target market. The target market includes potential and current customers, and businesses need to have a strong understanding of developments and attitudes towards the company. Know who your target market is, the potential for growth, and the level of satisfaction with your company’s products and services.
- Stay connected with customers. Finding ways to connect with customers on a regular basis is a great way to integrate an external focus into your role. Customer service calls, surveys, appreciation events, and seminars/training can be great ways to interact, receive feedback, and “be seen”. Make a conscious effort to be active within your company’s customer base.
- Get involved on an external level. Taking an active role in industry or community associations, participating in events, and networking help to keep the level of internal focus in check and provide a different perspective. Seek out these opportunities and choose wisely.
Over time, it’s not uncommon to notice a shift in terms of how time is spent and the increased external perspective that is generated. A balanced approach is powerful, so make a real effort to “look out the window” every day.
- MEDIA: CBC News Network Weekend Business Panel (July, 2022) - July 4, 2022
- MEDIA: CBC News Network Weekend Business Panel (June, 2022) - June 6, 2022
- MEDIA: CBC News Network Weekend Business Panel (May, 2022) - May 9, 2022