This is the second part of the smart lean ideas series. In the previous part, we discussed how cooperation and competition differ both within and among the organizations.

Growth vs. Sustainability

Business sustainability is defined as the ability of a company to manage financial, social and environmental risks.

A company cannot handle revenue growth faster than its resources allow. If a company grows too fast or a product becomes much in demand, it may not have the resources to meet the demand thus losing potential customers. There are two crucially important aspects of company sustainability, namely workforce and product sustainability.

Therefore, a company should not concentrate only on revenue growth but also on using its resources wisely. It is not enough to create only win-win situations where both the business and the customers are satisfied. The focus should be shifted to creating win-win-win situation (company-customers-workforce). Otherwise, long-term sustainability may not be achieved.

Part of company sustainability is its workforce sustainability.

If we may quote Richard Branson, the founder of Virgin Group: Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.

Employees are not robots. They have feelings, moods, own thoughts, ideas, and problems.

Their efficiency and/or creativity may be reduced by various external factors like bad moods or personal problems, or by internal factors such as routine, the feeling of not being appreciated or paid enough, or thinking that their ideas and solutions are unjustifiably rejected. Empathetic leaders more easily motivate their teams and achieve better results because they pay attention to those tiny details which are very significant for a good performance.

We all know that routine stifles creativity. People need to be challenged and provided with a ground or space where they can generate, experiment and test ideas.

What lacks in most companies is employees’ passion and enthusiasm. Maybe it is a good idea even to hire a “morale booster”, a person who will closely observe employees’ mood level and will help them resolve their problems, turn routine work into a game or just cheer them up.

We even intend to test our idea “Workplace as a Playground” in the near future to establish whether we can bring back enthusiasm, interest and offer new challenges to employees.

Another part of company sustainability is product sustainability. It means that a product should not be harmful to the environment and should create social and economic benefits.

In his study, Driving Revenue Growth Through Sustainable Products and Services, Thomas Singer reports that between 2010 and 2013, revenues from sustainable products and services among sample companies grew by 91 percent, while overall company revenues grew by 15 percent.

This proves that sustainability is not achieved on the account of business growth.

A product should provide not only value but also added value to its customers. This is the so-called win-win situation when both parties are satisfied – the producer and the client. In the opposite case, when the customer is not offered the (added) value he/she expected, the product will be sold in large quantities in the beginning and at some point sales will drop significantly.

When customers are offered no or little value, then we have a win-lose situation. A simple example thereof is a children’s tabletop game.

It is expensive, packed in a large glossy box with attractive colorful drawings. A mother is ready to pay above her budget because she either is trying to deal with the so-called “nag factor” used by marketers to sell child products, or wants to buy a present on a certain occasion. When the child opens the box, it turns out that it is 2/3 empty and the game is not as fun as advertised. The mother gets angry with the producer and starts to appeal to her contacts not to buy the product? With today’s technologies the word spreads quickly. Is this a successful sales strategy in the long run?

Therefore, the how-to-sell-the-product attitude should be replaced by the thought how I can help customers with respect to product development and sales, so that strong relationships with customers are built and a successful product is developed.

Effort-making vs. Magnetism

As we wrote in our previous post on lean ideas, business development is not equal to sales. It starts with product development, goes through human resource management and ends with sales. The best strategy to offer a sustainable product and put less time and effort into sales is to create a “magnetic” product/service, so alluring that will make customers seek it out. There are many examples of such products – Google, Facebook, Twitter, LinkedIn.

To better understand the notion of product magnetism, we may just answer the following simple questions: How do the above products attract customers’ attention? Do they make profit? Can customers use them for free? Are they improved all the time? Do customers need them? The answers to these questions give us an idea of what a magnetic product is.

The first component is customer (added) value and/or product uniqueness. The easiest way to achieve it to apply lean strategies and test the product before it is ready or, if possible, even before the minimum viable product is built. The aim is to identify what needs it might satisfy and whether its developer’s assumptions about prospects’ behavior towards the product are correct.

Second, magnetic products do not rely on visual effects since it is impossible to achieve 100% likability among potential clients. In addition, products focused on glossy/shiny and attractive appearance, offering no value, may be sold for a certain period. It does not provide sustainability and further growth.

Third, they should be constantly improved and innovated. Customer needs change over time or new ones arise. Therefore, developers should closely observe customers’ behavior, inquire about their opinion or suggestions, and analyze the received information in order to tailor their products to customer needs.

Thus businesses can save time and investments by not building products that nobody is interested in or are difficult to sell because they have copycats. Less money and efforts will be spent on sales, marketing and advertising. To completely finish a product that in the end turns out to be not “sellable” and invest even more in its marketing is a poor strategy which consumes time, money and effort.

How do you find these strategies? Have you already applied them within your organizations? Share your thoughts in the comment section below.

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