For years I’ve come to this blog to write how customers and the world of sales and marketing are changing at rates never before seen. Today I'm excited to share some changes that we're making at Imagine in how we are working with clients.
I've been advising business owners on growth my entire adult life. Figuring out how to grow businesses isn't just my vocation, it's my avocation.
For the first nine years of running Imagine Business Development, friends and associates would tell me that I needed to find a hobby...something that would allow me to break away from the intensity of what I do on a daily basis. I took up brewing beer, coaching baseball, reading fiction books and bird watching (okay the last one is a lie, I never took up bird watching). Finally, I realized that this is my hobby.
I'm lucky. I've had a front-row seat - as a student, practitioner and advisor - to the most dynamic period in business in the past 100+ years. I've worked firsthand with more than 2,000 companies and I can say conclusively that growing a business today is more complicated and challenging than at any time I've seen or studied. On the one hand, organizations have access to more talent, technology and opportunity than ever before. It is these assets and strengths that are also making things as challenging as they are. As Brian Halligan, CEO at HubSpot, shared in his keynote at Inbound17, "It's never been so easy to start a business...and so hard to scale one."
Over the last few weeks, I've published several posts that highlight the difficulties, opportunities and formulas for success. Several weeks ago I shared the secret that few agencies want you to know - that inbound marketing isn't working. Last week, I shared the critical takeaways from HubSpot's Inbound17 conference, and just a few days ago I shared the results of our research into the path for successful demand generation.
The Natural Evolution of Markets
You'll notice that earlier I mentioned that this is the most dynamic time in business in over 100 years. It is not, however, the most dynamic time in history. The shift from an agricultural society to industrial was a more prominent shift. History is a powerful teacher to predict the future.
When economies and markets experience shifts like these, they tend to go through three predictable (albeit highly disruptive) phases:
The Land Grab: In this period, there is massive growth of and investment in new companies that move as fast they can to grab new opportunities. There's tremendous confusion as everybody competes with everyone, trying to be everything to everyone.
The Integration Phase: As the rate of complexity and opportunity explodes, markets begin to find order and companies begin to order themselves around more defined markets, niches and areas of expertise. More on this below.
The Maturation Phase: What was new becomes normal (and old).
While we are by no means through the first phase, we're certainly more than halfway through. This is where we begin to see the seeds of the integration phase take hold.
Creating Order from Complexity: Horizontal & Vertical Expertise
If you look at any complex business system where different mindsets, skills, styles, approaches and strategies are necessary to succeed, you will see a familiar form in how they sort and create order. Most providers will move what I call a vertical expertise, and a few will provide what I refer to as horizontal expertise.
You'll see an example of this in the origins of the marketing world. As marketing or more accurately, promotion took on a professional approach, it gave birth to a new business - the advertising agency. As any fan of Mad Men can attest to, hundreds of agencies started promising to do everything for everyone and working as hard as they could to become THE dominant agency.
Over several years, it became clear that a multitude of disciplines would be required to succeed, and as those disciplines emerged, the need grew to integrate, align and apply the varying disciplines. Horizontal expertise emerged in the form of "the agency of record."
Construction is another example of horizontal and vertical expertise emerging to create stronger, more efficient and optimal results. Horizontal expertise is provided by the general contractor, while various subcontractors bring vertical expertise.
While these are all examples of business organizations creating order through this model, the core structure of a business is built around leveraging horizontal and vertical expertise.
The Chief Revenue Officer
Over the last decade, a new role has emerged in forward-thinking, high growth organizations. Typically referred to as the Chief Revenue Officer, the purpose of this role is to view the new revenue generation process with a holistic viewpoint. Their job, when done effectively, turns revenue generation into a manufacturing-like process, fully aligning the strategies, tactics and activities between sales and marketing; and further aligning and integrating strategic intent and execution.
The CRO role is a perfect example of horizontal expertise unlocking the latent power lying dormant within the vertical expertise to improve performance and efficiency. This role is non-existent at the vast majority of small and mid-market businesses. Further, it's an extraordinarily difficult role to fill.
The unique ability Imagine has always brought to our clients is the ability to understand, align and integrate multiple disciplines, issues and opportunities. Our "secret sauce" has always been the unique understanding we have where sales and marketing come together to create predictable, sustainable and scalable revenue growth.
Realizing that this is so often the missing ingredient for companies that are serious about growth, we've decided to make this the focus of our future.
In some ways, this is not a significant shift for us. It's a natural evolution of our strengths and expertise. Additionally, it doesn't mean that we'll be doing fundamentally different things tomorrow than we do today.
In other ways, this is quite significant. The biggest shift (and value for clients) is that we're no longer focused on being the company to "do" the actual services or work for clients. A weakness of the inbound marketing agency model has always been the need to execute tactics to justify fees. It's a problem because:
- It goes against the grain of business evolution of "open gardens" where users can put together best in class services rather than relying on one provider that does everything.
- It limits the ability to either grow with clients or serve larger ones. When the economics of running an agency put pressure on you to provide the services, there's always a battle between the agency and the client of whether the client is better off doing it internally and whether they can do it less expensively.
- While a core role of the agency is advisory and expertise, the model inherently conflicts with putting the clients best interests first.
While we'll still be providing services to clients in some situations, it's no longer the focus of our value or our economics. Moving forward we'll be developing partnerships with agencies and providers so that we can make a simple promise to our clients:
The best strategy, the best platform, the best structure and the best implementation designed for your unique needs and objectives.
The Growth Company of Tomorrow
The entire approach to outsourcing services is undergoing a shift as well. As remote teams increasingly become the norm and technology continues to reduce the impact of geographic proximity, the entire notion of "do it yourself" or "outsource" is losing its meaning.
Tomorrow the dominant question that successful growth companies will focus on is: how can we get the best capabilities to execute our strategy as quickly and efficiently as possible while exposing ourselves to the least amount of risk?
The answer will increasingly be by mixing the capabilities and expertise provided by outside firms and advisors with key internal capabilities. This will enable companies to use their resources powerfully and speed up their execution.
We're excited to be a pioneer in what we are convinced will soon become the standard approach for companies focused on growth.