Why CEOs Should Commit to Many Small Battles Instead of a Single Big One19 December, 2016 / Articles
If you are the CEO of a large, established company, you should be able to enjoy the benefits of size, including the ability to learn from a broad, longstanding customer base. With more customers to seek feedback from, your firm should be able to detect changes in the market faster than smaller competitors. And with size comes the resources to deliver what the market wants.
But that may not feel like your reality. Too often, large size becomes a hindrance. Insurgents swarm and thrive by targeting customers that your company consistently underserves. The younger firms seem to excel in speed, experimentation and delivering a steady stream of innovation. Meanwhile, inside your offices, internal issues constantly steal attention from customers’ needs. Your senior executives spend more time negotiating among departments and internal functions. Innovation gets handled centrally, far from the front line. Customers are neither involved in the process nor, in some cases, even welcome.
As CEO, you can fight back by sponsoring micro battles — discrete, narrowly defined, customer-focused initiatives pursued by small cross-functional teams. Micro battles force everyone to behave like insurgents, focusing only on what’s essential to meet a narrow goal. Micro battles aim to increase sales (through share gain or category growth), deplete a specific competitor’s sales, and put learning how to innovate back to the center of the company’s activities and executive attention. Waging micro battles helps a company do several important things:
- Restore the voices of customers. As decision-making switches to micro battles, the voices of customers dealing with the company’s front line grow louder in executive meetings.
- Move and innovate faster. Micro battles increase the cadence of the entire organization by tuning to the pace of the market instead of calendar-based budgeting or planning cycles. I’ve seen successful companies break down micro battles into 30-day sprints. Executive meetings focus on reviewing the dozens of battles in progress, with each reporting every 30 days on the missions accomplished or destroyed. That way, executives can adjust resources quickly.
- Improve specific, not general, abilities. Too often, senior executive teams favor horizontal, internally focused actions like “building a world-class finance function.” Micro battles reorient the organization to vertical initiatives, such as increasing sales of a specific product in a specific region or channel. Such vertical goals often require embedding someone from a central function — say, finance — on the team, which helps reconnect matrixed functions to what’s actually happening on the front line.
How? Consider a typical corporate goal: Grow sales of electric hand tools in Western Europe by 4%. That might encourage people to work harder, but it doesn’t require that anyone work differently or think outside their own department. A micro battle, by contrast, has a tightly drawn goal: “Let’s win 50% share in Western Europe of the do-it-yourself store business for mid-priced circular saws by displacing our main competitor.”
To win such a battle, you need a team made up of people who are closest to each market. In the saw example, this would include the global head of mid-priced saws, who leads innovation and manages the costs of the product, and the account head for do-it-yourself stores in Western Europe, who manages sales and ensures the product is presented in the right way for shoppers.
The team also needs people who provide crucial support—a supply chain expert, who can help drive down the cost of mid-priced saws, and a consumer insight expert, who understands consumer preferences for hand tools. Both probably work for a central support function, where they’re shielded from the heat of the micro battle. Embed them in the team instead. Make them share the urgency and the consequences of doing the job well or poorly.
As CEO, your role is to ensure that the center supports and learns from these teams, through systems that take the lessons from each micro battle’s successes and failures, and disseminate the ideas companywide. As the European team starts making inroads with a particular offer, the Asian team can target the same competitor with a similar offer that is tailored to local markets. Your executive team must quickly adjust resources between winning and losing micro battles, as needed. For the teams that log initial wins, your executive team should scale up both winning propositions (what and where you won) and repeatable models (how you won). The point is to learn: Find out what works, and repeat it in as many places as possible.
For example, one multinational personal-care company was performing well in general and modern trade channels, but realized it could dramatically increase sales of its health and beauty products by selling them in the fast-growing drugstore channel. That required two things: First, they needed to shift their marketing to emphasize the health and wellness aspect of products such as skin care cream and second, they needed to add a sales team that understood the new channel. They set up a micro battle in one of the world’s biggest personal care markets—Brazil—and put together a team that included both the people in charge of brand and proposition development and those in charge of in-store trade promotions. The result: Sales took off in Brazil and the company quickly began rotating people from other regions through the Brazil micro battle team so they could learn from those efforts and then crack the drugstore channel in their own countries.
Committing to 25 micro battles over the next six months is very different from debating the mathematical allocation of targets across the entire business. And that’s the point. Choosing the micro battles to pursue involves discussions about how your company would win each one and how you would organize to sell.
Ultimately, micro battles restore your company’s ability to learn and then actually get stuff done. Growth comes not from targets set on high, but from lessons learned directly from customers and the front line.