Be the Company Customers Can't Live Without
Published by David Spotts,
Imagine you're the CEO of a startup offering a technology solution when the economy plunges into the worst downturn since the Great Depression. Up to then, you've delivered impressive results; your product has reached $22 million in revenues in four years on the market and your solution is recognized as a leader by the tech pundits.
Imagine choosing that time to tell your Board that, in essence, you want to walk away from about half of that business.
You may at this point be imagining yourself out of a job. But hear me out. As you may have guessed, this really happened and the "you" in the story is actually me. I'm happy to say that the conversation with the Board went quite well, our business has nearly tripled since that day, and I'm still the CEO. And I've learned that there is a big difference between being a good company and building one that customers can't live without.
Discover Where You Make the Most Difference
By staying close to your customers and listening to their problems you can define your true value. At Imprivata, we had an "Aha" moment when we realized that the kind of problems we were solving in the healthcare industry were larger, strategic issues, compared to the more tactical problems we were solving in other industries. It was clear that we had what it took to deliver value that our healthcare customers couldn't live without. Make it your business to figure this out and determine where you are solving your customers' highest-order problems.
And then, of course, do your homework about the competitive landscape. Just because your solution has the most to offer one industry doesn't mean that industry lacks other, perhaps even better, options. Once you identify your best purpose, determine what's driving growth in that market. Are there clear market leaders? What are the holes in their solutions? What value do customers still need that the current market isn't delivering? Are there any external conditions that could inhibit or encourage growth? How big is the opportunity?
Make the Big Bet
CEOs get paid to make the high-impact decisions that simple data analysis doesn't render obvious. When a big opportunity presents itself in a dynamic market there's no time to "wait and see." You track trends, read the tea leaves, and know when to make your move.
With a big bet like a decision to narrow your focus on a make-or-break segment, you need to go all in. You can't be constrained by your old ways of thinking about product enhancements and other investments in the future. Now everything must be viewed through the lens of being that company a certain set of customers depend upon. Consistent communication with customers to understand their evolving challenges, then innovating with that perspective in mind is critical to maintaining strategic importance to your clients.
Making the bet also means staying the course, always sticking to the commitment. Every decision you make needs to align with the goals set out in the plan. If something doesn't support the plan, you need to make the tough call no one wants to hear and say no — even if it means giving up a few million dollar deals (something we had to do multiple times). If you, as the CEO don't stay committed to your plan when it's difficult to do so, you can't expect the rest of your executive team — or staff — to make the transition.
Align Your Team
Once you have discovered your purpose, done your homework, and doubled down on your bet, it's time to focus on team building. Do you have the right players in place to engage with your clients' next wave of strategic issues? Where are the gaps? In building our team we place value on passion and creativity over prior experience, and look for people who have the courage of their convictions.
In your interactions with the team, you need to communicate your focused plan so often that it feels like overcommunicating. Distill the company vision so that it is concise and easily understood. Everyone — whether the person is the SVP of sales or an entry level administrator — needs to understand how the decisions they make in their daily roles can help that vision materialize. Every year, we set three corporate goals and announce them at our annual kick-off meeting. The goals are then reiterated at each quarterly company meeting, and at departmental meetings throughout the year. If everyone knows the goals, it is much easier for employees to make effective decisions that move the company forward. And the more invested employees are in this process, the more pride they take in the company's overall success.
In 2012, Imprivata's revenue reached approximately $54 million. Three years after we decided to consolidate our focus on a single vertical market, more than 80 percent of that revenue is from the healthcare industry. Focusing on the market where we have the most strategic value for our customers — where we have become intrinsic to their success - has given us a higher sense of purpose.
The irony does not escape me that we have a steep economic downturn — something many young companies don't survive — to thank for this. For our organization, the financial crisis and recession emphasized how valuable it is to be a business that customers can't live without, regardless of the economic cycle. It forced us to focus on where we could deliver the most value, and to chart a new course.