RITA MCGRATH
FLYWHEELS VS. RELATIONSHIPS – WHY YOUR BUSINESS ARCHITECTURE MATTERS TO YOUR INITIAL MARKETING PLAN
Thought Sparks
In developing an initial marketing plan, it is crucial not to be confused about what kind of business architecture you are building in order to establish your initial metrics for success. Geoffrey Moore has a great way of capturing this in the distinction between complex systems versus volume operations sales.
Rita McGrath / Thought Sparks
Which hand do you lead with?
Geoff likens the distinct business architectures to your organization’s “handedness.” In other words, we all have two hands, but for the most part use one more effectively than the other. In business, what that means is that there will be one taken-forgranted model for what we should align around. When you mix and match models, the inevitable result is a lack of alignment and confusion. Geoff explains in detail here. You can watch a recording of our Fireside Chat here.
Rita McGrath / Thought Sparks
Metrics suitable for complex systems sales A complex systems sale begins with the establishment of a highquality relationship with a customer. Understanding customer issues and building trust are paramount. You would want to know the number and quality of the potential client network members, the nature of the conversations you are having with them and of course whether they have an ability to pay for the kind of hightouch, customizable services you might offer. Customer research is expressed in stories and anecdotes. The sales cycle can be very long – years, in some cases. That doesn’t mean you shouldn’t stay on top of keeping in touch and communicating. With these kinds of sales, you never know when the right intersection of problem / budget / decision will occur. Rita McGrath / Thought Sparks
Metrics suitable for volume operations sales
A volume operations business seeks to create a flywheel for sales. In these kinds of businesses, a zillion small actions eventually accumulate to create a large customer base that feeds an ongoing set of transactions. As Jim Collins, who features the model in his book “Good to Great” argues, the flywheel takes time to get going, but once it achieves momentum it is using its own force to keep turning.
Rita McGrath / Thought Sparks
Implications for designing a marketing plan The choice of business architecture is going to determine other key elements of your marketing plan. The design of your offers, how you talk about them and of course your unit of business will all be derived from that choice. It will also determine the kind of team you need to build, the digital presence you need to create and how much you’ll need to invest in what kind of brand-building. If you’re not clear on what your architecture is going to be, now would be a terrific time to get alignment around that with your team.
Meanwhile, over at Valize
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