Founder's Mentality Blog
As an insurgent, your company declared war against your industry on behalf of underserved customers. What you lacked in size, you made up for in speed, with every function focused on customers and the front line, working together to tackle customer issues quickly. This relentless experimentation not only helped your customers, it also produced a constant stream of innovation that was a major engine of organic growth.
But as you grew bigger and more bureaucratic, internal issues stole attention from customers. You now spend more time optimizing functions (and negotiating among them) than you do with your customers. Innovation is handled by a centrally controlled pipeline far from the front line. Customers are neither involved … nor welcome. And growth grinds to a halt.
This is the lost engine of customer-led growth. Fortunately, there’s a four-step solution that we call micro-battles.
Step 1: Break macro objectives into micro-battles
What is a micro-battle? It is a discrete, customer-focused initiative that can be pursued by a small team whose goals are to increase the company’s sales (through share gain or category growth), deplete a specific competitor’s sales and learn key lessons (including innovation ideas) that can be applied to other parts of the business.
Most companies don’t do this: They tend to have overall revenue objectives that cascade down to small revenue targets that (largely for accounting reasons) are rolled up by geography, category, brand or product. The result? Bite-sized sales targets, such as “Let’s grow sales of drills in China by 4%.”
A micro-battle, by contrast, might be something like this: “Let’s win 50% share in China of the DIY Co-op drill business by displacing Bad-drills Co.” Defining micro-battles is hard: You must know the most profitable customer segments, the reasons for their preferences, the channels they use and how your competitors stack up in each area.
Prioritization is critical: You must understand the real economic value of different customer segments and the threats or opportunities of the most relevant competitors by channel. Targeting Bad-drills Co in DIY Co-op matters if DIY Co-op is the top share growth channel and Bad-drills Co is either highly vulnerable in that channel or your biggest threat.
Debating which micro-battles to pursue involves a discussion about how your company will win over the next five years and which battles are most important. Committing to 50 or so micro-battles over three to six months is very different than debating the mathematical allocation of targets across business cells.
Step 2: Build the teams
Did you read Step 1 and yawn because you do build growth targets based on competitive battles you intend to wage? If so, then congratulations: You’re good at defining where to play. But micro-battles are not just about choosing your battles, they also are about empowering a cross-functional team to lead you into those battles.
Select the core team of franchise players. Franchise players or “kings” are the core team most responsible for delivering what you promise to customers. In the drill example, let’s assume that our franchise players include the global head of mid-priced drills, who leads innovation and manages the costs of the product, and the account head for DIY Co-op in China, who manages sales and ensures the product is presented in the right way for shoppers.
Embed central support locally. Imagine you have supply chain experts who know how to drive down costs of mid-priced drills and some consumer insight experts who know all about consumer preferences for drills. Both probably work for headquarters, where they don’t feel the heat of the micro-battle, so embed them with the team. Make them share the urgency and feel the consequences of doing the job well or poorly. They might be able to help you convince DIY Co-op that your company has what it takes to grow the mid-priced drill category in China.
Define specifically how central support teams also will help. Be sure the team knows that Bob from global marketing and Jack from finance are standing by to support the product push and price negotiations.
Build the right feedback loops. Provide your teams with the immediate customer and competitor feedback they need to adapt and respond.
Step 3: Define the rules of engagement
With battle lines drawn and your teams armed and ready, it is time to reconfirm the rules of engagement. You should already have a compass—the page of non-negotiables that your franchise players cocreated and that translate your strategy into frontline routines and behaviors that everyone understands. These are your Repeatable Models®—the set of activities that your best people do when they are doing their best to serve your best customers. This is not a how-to guide for your team, but, similar a real compass, it gives them a clear north to help them set their direction. Let’s assume that the following are two relevant non-negotiables for the China drill team:
- We must always win in winning channels.
- Our channel partners will never suffer from stock-outs.
This means the team knows that it has to win, say, in the DIY Co-op’s online sales (the winning channel) but cannot launch an offer until the logistics are fully sorted.
Step 4: Redefine the role of center
With 50 competitive battles happening across the globe, your teams desperately need the center to do three things.
- Learn: In the chaos of battle, your teams will have successes and failures. The center needs to help them learn rapidly, and it can do so by collaborating with them to build the right inner-loop feedback systems to collect and respond to customer, channel and competitive feedback. And the center can facilitate peer-to-peer conversations and encourage outer-loop feedback that helps the company learn what it needs to change in its systems. Make sure that the China team learns from the Indonesian team that it targets the same competitor with the same offer in a similar channel.
- Adjust resources fast: Within any micro-battle, your team will find they are short of certain skills and long on others. The center can help mobilize and demobilize resources rapidly across micro-battles.
- Rapidly scale winning propositions and Repeatable Models: Some of your teams will win spectacularly. (Others will fail wonderfully, too.) The center must move fast to scale winning propositions (what you did to win) and Repeatable Models (how you won). Micro-battles revive the notion of endless experimentation, but that is the means, not the end. The end is to find out what works and do it repeatedly in as many places as possible.
If your company has lost its customer-led growth engine, following these four steps will:
- Revive customer-led innovation. Micro-battles rebuild the muscles that developed when gang tackling customer issues and using endless experimentation. Their primary goal is to refocus your organization on specific initiatives around specific customer segments. If everyone in your company is leading these teams, embedded in them or allocated centrally to make sure they have what they need, then everyone’s focus will be on the customer and winning daily battles to make sales.
- Increase cadence. Micro-battles radically increase the cadence of your organization by focusing on the pace of the market instead of calendar-based budgeting or planning cycles. In our experience, it is best to break down micro-battles into 30-day sprints. Executive meetings focus on reviewing dozens of battles, each of which reports every 30 days on missions accomplished or destroyed. The company focuses on adjusting resources quickly to meet the rhythms of these battles.
- Strengthen the voices of customers and the front line. What matters in micro-battles is how the company performs across dozens of customer relationships. As decision making switches to these daily battles, the voices of the front line grow louder in executive committee meetings. Discussions focus on supporting individual customer negotiations or specific competitive battles. The bulk of information assessed and debated is about battles, not reports from internal committees.
- Increase use of the vertical axis in managing broad change programs. Broadly speaking, all corporate change happens through vertical or horizontal action. For example, building a world-class finance function is horizontal. “Fixing drills in China” is vertical, requiring teams from the local operations to the center to do whatever is necessary to achieve a solution. Horizontal and vertical initiatives each have their pros and cons, but leadership teams too often pull the horizontal lever because executive committees are weighted toward global functions with more horizontal authority. The problem with this is that you get a lot of centrally driven, functionally led change programs that take a long time to get results and keep a lot of people internally focused.
Micro-battles reorient many horizontal initiatives to vertical. Instead of a broad goal such as “world-class finance,” you might say you want finance teams to be a vital part of our partnerships with our core customers and then add a finance person to the drill team. Involving finance in multiple micro-battles will improve the finance function, but the work happens in real sales situations. It forces your functional folks to think about how to pilot and adapt to broad change through a set of micro interventions. As the organization shifts to create broad change through targeted experiments, this creates a bias for action and a rhythm of smaller victories.
- Improve leadership development. Out of micro-battles, new leaders will emerge—they are the folks who win battles in the marketplace. Rewards will flow to those who make things happen, lead local teams and mobilize global resources to win locally. Rewards will also go to support functions that help those leaders. Those who slow and block action—the energy vampires—will be exposed.
In short, micro-battles help revive customer-led growth, and they also help to increase the cadence of the company and its bias for action. Micro-battles suggest that one of the best ways to become a scale insurgent is to make sure that your leadership team empowers dozens of teams throughout your organization to launch their own insurgencies.
Repeatable Models® is a registered trademark of Bain & Company, Inc.