Spark Partners helps new businesses achieve breakthrough performance

If you can make your competitor's growth stall, they have a less than 1 in 10 chance of returning to a growth trajectory. Stalls lead to prolonged periods of flat performance about 3 times in 10, and to declines in performance 5 times in 10. Two times in 10 they lead to quick failure. Stalled competitors are twice as likely to fail as to grow, and they are six times more likely to limp along with no growth.

Seven out of 10 start-up business plans are heading for a train wreck. They will be quickly knocked out by changes in the competitive playing field that have nothing to do with the plans of the small company. Customers and competitors move faster than they used to. Too many companies spend too much time trying to force the business plan to succeed.

New businesses should create the train wreck, destabilizing competitors and the market. They move first, often with a Disruptive Strategy. However, early success too often leads to Lock-in, and the now unbalanced situation continues evolving quickly making the early Success Formula obsolete. Only the competitor that survives a series of ongoing market, technology, customer, distribution, supply and pricing changes will come out the winner. "First mover advantage" belongs to the player who changes the competitive playing field and then thrives on driving ongoing change.

Successful new businesses align the Success Formulas in their organization with newly emerging requirements in the economy and the industry. They Disrupt customer Lock-in and use White Space at customers to develop new opportunities for their products. They make sure their functions, work teams and individuals align with the new customer requirements being created. They make sure they avoid "locking in" on previous business assumptions tied to top leaders' histories, functional group standards or conventional wisdom. And they create a competency around Disruptions and implementing new capabilities earlier and faster than competitors.

What can Spark Partners do for new businesses?

We help clients recognize that extending existing business models has diminishing returns.

In a smart world, new competitors figure out the old industry and company Success Formulas and they drive down returns entrenched competitors seek from extending that model. However, most new businesses fail to see the same risk in their own Success Formula. They fail to recognize how often early customers do not reflect a larger market, how early economics are easily replicated (or destroyed), how future assumptions are pure fiction, and how tied they become to a technology, a customer, a sales model, or a business plan. While projected returns appear high, they rarely (less than 1%) develop. Given the time to build a business, early tactics (and often strategies) will become obsolete before the business achieves enough size to make any market difference.

The games entrepreneurs used to play are no longer safe to play. Entry barriers, scale barriers, are nonexistent and/or indefensible. Diminishing returns come in fast. Porter's Competitive Strategy was based upon a Newtonian (static) view of business. That does not work in an information rich, information transparent, dynamic, high clock speed world. Existing companies may be slow to react, but other entrepreneurs will seize the tactics and quickly move toward the above-average returns.

We help clients realize that old assumptions about lifecycles and returns are myth.

You cannot Lock-in on a Success Formula early and "drive" toward better results. Patterned Success Formulas develop far later in the lifecycle than assumed (rarely when revenues are less that US$400M to US$1B). Likewise, businesses can no longer expect to have prolonged periods of losses which will be "made up" in distant years with exorbitant, protected profits. New businesses must retain extremely high flexibility, have a competency in agility, and above all learn to make money early, and all along their growth path.

Unique to Spark Partners is our understanding of how Success Formulas get out of synch with stages in the lifecycle, nearly always leading to failure. Almost no one understands how to manage their Success Formulas, and how to use them effectively along the lifecycle stages. By helping new businesses manage lifecycles their likelihood of failure drops extremely low while their probability of success is magnified many-fold.

Additionally, Spark Partners is capable of using lifecycle analysis to predict the behavior of competitors. There is a high correlation between behavior and lifecycle, and new businesses can compete far more effectively by focusing accurately on easily predictable competitive behaviors.

We help new businesses to recognize Lock-in and more effectively manage Disruptions.

We help new businesses create more disruptive opportunities. We evaluate new opportunities and divide them between extension opportunities and disruptive ones. Most companies are far too heavily dominated by extend strategies that are unlikely to provide breakthrough performance.

We provide a "Team B" or "Red Team" review of growth plans and work teams. We are impartial, external and unbiased (with a good framework) capable of providing unvarnished truth about plans and opportunities. Not only the intellectual integrity, but the likelihood of implementation and the likely market and competitive reaction.

Businesses confuse extension strategies with innovation strategies. They expect better returns out of their plans than they should because they will achieve extension-level returns when planning for innovator's returns.

Those business plans that do implement innovation almost always lack the understanding of how to get customers to adopt the innovation. Customers are Locked-in to an existing solution, and only switch when given the proper White Space to experiment, learn and then migrate toward something new. New businesses must be experts at overcoming customer Lock-in and implementing customer White Space to create growth.

Further, new businesses often overlook the Lock-in of early leadership. Too often the management team can say the right things, but is unlikely to "walk the talk." They can't wait to implement structures that create consistent behaviors and decisions, far too early in the lifecycle. They throw away agility in pursuit of better margins and a mythological view of efficiency creating enhanced performance. We assess team members, including using our own diagnostic tool, and create a highly accurate forecast of behavior and likely outcomes.

We help new businesses specify their Success Formula with enough detail that they can clearly identify their sources of behavioral and structural Lock-in.

In addition to identifying Lock-in, we identify the "police" who enforce adherence to that Lock-in, and the implications of that Lock-in on what gets done and likely future outcomes.

There is a reason most growth strategies become dominated by extension opportunities. That reason is Lock-in to what worked in the past, and the implementation of police organizations that systematically weed out any activity which isn't on the historical track.

Unless you clearly specify the Success Formula and the Lock-in it has created you cannot overcome it. Unless you do this work, you will continue doing what you always did because you haven't addressed the source of your own behavior, leaving you inert to change it. Attempts to do anything different will be quickly arrested by the status quo police - who's job it is to stop such activity.

We help identify Disruptions which will address the Lock-in and open the doors for breakthrough performance.

Disruptions can take many forms. Good ones clearly address the Lock-in and thereby provide an opportunity to reshape the Success Formula. By definition Disruptions include White Space in which new things can occur because they are given the proper level of permission and resources.

Even new businesses that see their Lock-in don't know how to deal with it. They either ignore it (hoping it will go away) or they create huge tension and destructive behavior by attacking customers or competitors.

Activity in White Space is concentrated on what to do to evolve the Success Formula. Not how to do something and then integrate it into the existing Success Formula. It is "plan forward" activity, not "develop to extend" activity.

Even though all new businesses are born in some form of White Space, frequently that space is ineffectively created. It has insufficient permission or resources to succeed. And, most new businesses so quickly Lock-in on trying to replicate early success that they completely obliterate any additional White Space within their organizations. Lastly, very few managers know how to effectively manage White Space - too often applying industrial-era principles quite ineffectively leading to failure.

We isolate those who will negatively react to the Disruptions, and prepare the organization for the "antibody attack" that will come.

We develop plans to keep the new behaviors and activities operating. We help businesses manage White Space.

White space must be protected. Existing Success Formulas would rather kill new ideas than accept where they lead.

The way to do this is NOT by keeping White Space isolated. Rather, it requires that the output of the White Space be exposed to everyone and discussions undertaken regarding adoption (not integration) of White Space learning.

We help clients be receptive to new learning, adopt it early and take action quickly. Agility is a core requirement of new business success.

We provide operating guidance for the White Space.

Most of today's leaders have experience and training for undertaking extension projects. But they do not have skills for managing in the White Space. We provide goal setting, metric setting, resource coordination, organizational planning and coaching skills.

New business leaders frequently delude themselves when thinking they have skills to manage in White Space. Just as Lock-in weeds out growth options it weeds out skills for managing non-extension (competitively disruptive) projects. If they try to manage new opportunities both the people and the processes brought forward quickly scare the White Space projects right back into the traditional Success Formula and often kill it. White Space success requires different metrics, operating principles, and management to create new growth businesses.

We assist in delivering alignment across the individual, work team, function, business unit, company, industry and economy.

We identify the key elements of the new Success Formula, and interpret those into specific change requirements at each level. We then coach communication and feedback in order to align these Success Formulas. In today's competitive markets, this is the core of successful strategy.

Most strategy activity is horribly out of date. It is based on extensive data analysis and charting of historical and existing conditions. It is based on Newtonian notions of markets and competitors. It is driven by assumptions of finding "the right answer" and then implementing it.

Successful strategy today is not about controlling markets, customers or resources. Nor about controlling behavior of your own organization or competitors. It is about understanding relative capability and moving quickly to create strength where competitors are weak. It is about closely monitoring markets and competitors, and reacting quickly to create and foster opportunities.

Organizationally, strategy is about making sure that the Success Formula is understood and available for building upon in the organization. When people see and understand the Success Formula (as well as sources of Lock-in) their skills and creativity can be applied toward a more successful future. New Success Formulas can be created continuously which allow for improved performance and rapid growth.

Successful strategy leads to the Success Formulas of individuals, work groups, functional groups, business units and companies agreeing. When these agree the people are empowered and they will move quickly toward success.

Contact: ADAM HARTUNG, 847.726.8465, Adam@SparkPartners.com
For more information, visit www.SparkPartners.com.