Position your company to thrive through disruption with a strong early warning system
Guide to episode
- Most companies anticipate change by watching their industry
- That reveals signals too late - after they've already impacted the market
- The right place to watch is among your buyers' buyers
- That reveals trends and change much earlier - and let's you serve as a valuable resource to your customers as well
- Keeping your "ear to the rail" is a critical strategic function that should be embedded in industrial marketing
Hi, I'm Ed Marsh. Thanks for joining me for this episode of Signals From the OP. If you've seen Signals before, you know that I use each of these videos as an opportunity to take a little bit of a dive into an issue that, I believe, has strategic implications for industrial manufacturers. Today's topic is about how manufacturers anticipate and prepare for the change that's coming in their industry. You ask them about it, typically, you get an answer that sounds something like, "Whoa. We observe what's happening in the industry." Sounds reasonable, but I would challenge it. I would say, "Is the solution to disruption, really, to fit in by what everyone else is doing around you. Isn't that antithetical to what you might do to prepare for disruption?"
What do you do instead? I believe that companies need to keep their ear to the rail. It used to be, if you wanted when the train was coming, before we had the electronic systems that would pop it up on the display and let you know how far it was, you could either look out on the horizon, look for the dust and the smoke plume, or if you wanted more advanced warning, you put your ear to the rail. You could detect the vibration, hear the noise, far in advance. You'd have a much earlier warning for when the train was coming, so putting your ear to the rail.
There's something analogous for manufacturers today. You can wait for your trade association, or an industry leader, or a customer to raise a topic. That's like watching the horizon, looking for the dust cloud, or you could put your ear to the rail. Now, how would you do that? I suggest that the way manufacturers keep their ear to the rail is to really study their customer's business in depth, specifically, taking the step further and understanding the habits and expectations of their customers' customers.
Now, you may react to that and say, "No, that's not my business. That's up to my customers. All I need to do is deliver it to them, what I'm supposed to give them." You're right, fine, don't worry about it. Just recognized that, that will probably consign you to the pack and there's going to be some rough sledding, at some point, ahead. On the other hand, if you subscribe to a challenge or sale model, where if you believe that your role to be really successful in a complex sales environment is to help your buyers improve their business. Then, I believe, you've got to have that level of depth of understanding of their business and, at least, a good strong sense of what's happening with their customers.
For instance, I work with a lot of capital equipment manufacturers and some of them are in the packaging equipment space. Honestly, the little differences that are happening in package equipment, I'm sure they get blown up in the industry. People talk about this revolutionary new HMI, or new kind of drive, or all these different features that people talk about. And engineers will sometimes be interested in those as they're just trying to understand what's changing in the business, what might give them some kind of an incremental advance. But that's not what really drives a lot of capital equipment acquisition, instead using that example of packaging equipment, for instance. My clients will sell often to CPG manufacturers who have issues like workforce challenges. Getting enough qualified workers into their factories to drive the production they need to is a challenge.
Understanding that, and the implications of it, can help to sell additional capital equipment. Even going further, in many cases, those companies are selling to mass retailers. So understanding the pressures that come from the box stores, and how they buffet their suppliers with this turbulence of never-ending change, and expectation, and demands, can also be informative. I'm seeing opportunities like what's happening with data. How companies can accumulate data. What additional kinds of services they might be able to provide that their customers want and, even, how they can create new revenue streams, as an example. Listening to the way buyers are articulating their expectation to buy packages of service.
So not necessarily capital equipment, these are engineers, in many cases, that have grown up in a sharing economy with softwares and service and, now, product as a service is something that they're starting to think about, starting to discuss, starting to expect. So helping my clients, the manufacturers of capital equipment, understand those kinds of trends that the customers and their customers are expecting is what lets them keep their ear to the rail. None of it comes from observing competitors to the left and right, none of it does. You've got to look over the horizon and you've got to look into other fields of study, other disciplines, to see what the trends are and understand the kinds of things and don't look back.
You want to keep your ear to the rail, anticipate the kind of disruption and change that you can prepare for, cash for the opportunities, avoid the threats. That's what you do. Understand your customers and your customers' customer's business context. That's incredibly powerful.
If you like this kind of an unusual or contrarian view, I'd welcome you to subscribe to these weekly videos. You can do that signalsfromtheop.com, singalsfromtheop.com. Thanks very much, I'm Ed Marsh, appreciate you joining me.