After reading the article Break your Industry’s Bottleneck by Barrett Ersek, Eileen Weisenbach Keller, and John Mullins it left me curious in a number of areas. If you read the original article, which I suggest you do, you may also find yourself intrigued. Published by the Harvard Business Review this cleverly crafted article is rich in concrete examples and guides readers to understanding one thing – questioning where your industry bottlenecks are. Essentially, the article identifies 5 industry bottlenecks; outdated customer experience, cost categories, customer risk, disengaged employees, and negative externalities. Each industry in theory operates with at least one or more of these constraints, and your goal (to better scale your business) is at the mercy of identifying a bottleneck, and making a change to eliminate it.
Half the challenge in identifying your bottleneck is that it may not be as obvious as it sounds. If it were a simple find and fix solution, a competitor would have already resolved the issue. At this stage in the game, where entrepreneurs stand against well established market leaders, the bottleneck you are in search of for repair may require thinking outside the box.
SO what do the 5 different categories more or less represent?
Outdated customer experience – It seems these days that almost everything has been improved in one way or another, but there are also industries that have not changed at all. The key to resolving this bottleneck will be searching to find an opportunity for improvement. More than likely, the area you are in search of will require you to think outside of the box.
Cost Category – In some industries, spending in particular areas may be inevitable, but is it? Assuming that things are the way they are because it is the best way to function may need farther consideration. Perhaps the resolution to this bottle neck is to re-think the industry and potentially reshape the norm.
Eliminating Customer Risk – This bottleneck may only apply to some industries, however, should customers need to take on a significant financial risk when buying a product or service, resolving this risk will build phenomenal relationships. By taking on the risk on behalf of the client or customer, as a business you may be more likely to succeed over your competitors who do not offer the same value.
Motivating the workforce – Let’s be honest, not all positions in all industries provide their employees with enough incentive to remain in the position, let alone to excel in it. If this is the case for your business or industry, you may be facing a bottleneck with your workforce. Certainly there is something that will motivate employees – but what? Have you initiated anything out of the ordinary bonuses and Christmas parties? Businesses often focus on the customer experience, but it would be wise to remember to also focus on employee experiences too.
Saving the planet – It certainly is a challenge to say the least! Today the majority of industry standards are defined by competitors, and it is difficult to save the world and still have good margins. However if you were to refocus and drive passion into ‘saving the world’ or at least into becoming an environmentally conscious company you may gain a competitive advantage. There is a market for consumers who are interested in ethical products, so take a step back and evaluate, perhaps you can gain from doing good.
As an entrepreneur, the opportunity to discover a new product solution or service to an industry bottleneck is yours. Main market leaders are usually heavily invested in the status quo, and will continue to compete they way that they have. This leaves you with a window of opportunity to compete and if you are able to identify and resolve a bottleneck, you could potentially change the entire industry!