Here’s one highly certain trend: The U.S. consumer is unlikely to return to the level of spending before the recession. Blame it on the baby boomer generation, now realizing we must engage in a mad savings dash to make sure there’s enough money for retirement. With flatter consumption trends, US business investment absent an export surge will also grow more slowly.
If you can’t ride an improving economy to success, what might guide your firm’s strategy to regain revenue and growth potential? Business investment and consumer spending priorities remain so uncertain, how can a leadership team define true north?
Here’s what is certain: Focus business model innovations on unresolved problems and you’ll secure attractive growth.
- Food safety
- Affordable heath care
- Quality of life as we age
- A lack of time to balance family and work
- Environmental degradation
- Business’ need to differentiate in a growing sea of commodity offerings — otherwise the business cannot retain jobs or create new jobs
- Job creation in inner cities
- Learning English quickly
- Traffic delays
- Cost of college education for most families versus falling returns to a four year degree, especially for white males
- Affordable shoes that last
Take one minute and add to this list – it’s not hard. The problems are all around us.
Why are “big” problems such an attractive target?
Our entire US economy was built on solving complex, high-impact problems, from transportation to mass production to energy to education. Somewhere along the way US consumers moved up Maslow’s hierarchy of needs but as we did so, the companies that serve us kept adding more choices in existing categories at lower and lower prices. Curtains that families once saved for are now replaced on a whim. Styles change and last year’s wardrobes show up at Goodwill. Our teenage daughters spend their time eating out.
Yes there are real innovations – drugs that save lives, technology that has made our world smaller, photographic memories that are so much easier and cheaper to create. But if we took all new consumer products in US markets over the last 10 years and put those that truly improved lives on one side and all others on the other side, the piles would look even more out of balance than David and Goliath standing side by side.
Is it any wonder then that most new consumer products fail to meet their ROI objectives? It’s not just because of rapid copycat competition. The payback on new products has also fallen because most new products stem from “So what? Who cares?” problems.
To succeed as companies and as an economy in the decades ahead we must as leaders begin to identify the important, tangible problems that need solving and direct our efforts at solving them. And the best way to do this is to reduce the number of internal meetings and get out of our offices.
- Talk to customers about what keeps them from being more successful/joyful in their business/life and what works well in their life;
- Read more broadly;
- Travel to a new place where things don’t work exactly as they do in your own country; and
- Talk to people at least two or three degrees removed your day-to-day customers.
Solve a real problem and you’ll attract an attractive stream of consumer or business spending. Can your firm’s core competencies or relationships be deployed to address any of the pressing problems facing consumers or businesses? Look at the adjacencies to your current market positions. What vital problems are lurking there?
The Uncertainty Paradox
To discover more certainties in an increasingly uncertain world, be sure to read two other bloggers tackling the Uncertainty Paradox –
We hope you will share your ideas and observations.