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The power of momentum

(chinadaily.com.cn)
Updated: 2008-09-28 13:25

Its secret is its ability to connect totally with customers' sense of self, to create products that are more than mere goods but complete, perfect, and compelling presentations of value. The Prius, for example, offers a package of utterly compelling value to environmentally aware city-dwellers: With its low carbon footprint, practicality for city driving, and celebrity association, it is more than just a car -- it is a statement. The Lexus offers a totally different package of value to a totally different market, but the package is just as compelling, if you are part of its target market.

Consider the contrasting histories of the US auto industry and Toyota. American car manufacturers are among the best illustrations of the limitations of the pusher's strategy. They have given everything a try in terms of efficiency drives, but although they are now leaner, they are no fitter.

They sought to drive top-line growth through expensive advertising as well as sales promotions to generate volume, along with deep discounts to move inventories of finished goods. These expensive tactics were needed to compensate for the failure of their products to really connect with customers.

Toyota, on the other hand, has become the world's largest and most profitable car manufacturer, riding a fantastic wave of momentum. Its success is based on a number of factors, but underlying its achievement is a deep understanding of its customers.

First, Toyota proved that it could consistently deliver reliable, impeccably engineered automobiles. Once this crucial plateau had been achieved, it went on to innovate its range with cars that were somehow more than mere vehicles. Models like the Prius and the Lexus range appeared in their showrooms.

Both of these cars connect on an emotional level with their drivers' self-image and aspirations -- green and clean for the one, luxurious and status based for the other. This level of customer engagement did not happen by chance -- it was the result of a focused, iterative process that created the conditions under which the momentum effect, and the efficient momentum growth it delivers, could flourish.

Join the momentum league

We have spent many years focusing on the difference between the majority of ordinary firms and those few that deliver truly exceptional results. Our research has shown that increases in marketing pressure can lead to significant profitable growth.

The pushers delivered good performance and matched the Dow Jones average over a 20-year period. But who wants average growth when there is a much better option? The pioneers achieved revenue growth 93 percent greater than the pushers. That is the sort of growth that gets companies noticed, that drives exceptional increases in value for all stakeholders.

How did they do it? By creating the conditions that are needed for the momentum effect to take place. Ask yourself the question prompted by that meeting with a financial analyst at the beginning: When are we going to start building some momentum? Momentum offers an easier, more efficient, and exceptional form of growth.

But it requires the ambition to break free from the traditional reflex of using more resources to fuel it. The very things that seem to push you forward are holding you back. Momentum does not happen by chance. Nor can it simply be willed into existence. Achieving momentum requires an understanding of its source, and then the relentless application of a systematic process. It requires a momentum strategy.

Momentum leaders are not lucky -- they are smart. They have discovered the source of momentum and, with it, the beginnings of a smarter way to exceptional growth. Managers often talk about "riding the wave." Momentum leaders aren't that passive. They live by this motto: First build your wave, then ride it.

(For more biz stories, please visit Industries)

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