Huge potential for proactive companies

A thesis recently presented at LiU looked at how companies work with customer focus and innovation. Half of the companies investigated worked proactively with these issues. But half don’t. This means that there is a huge potential for companies to develop their operations and, in the long term, achieve better results.

Harald Brege at Campus Valla. Following in dad’s footsteps. Harald Brege’s father Staffan is professor emeritus in the Division for Industrial Management. “He’s good at posing relevant questions, so he has helped me in that way”, says Harald, who is now presenting his doctoral thesis at the same division. Photo credit: Mikael Sönne

Room for improvement

In one of the articles in his thesis Exploring Proactive Market Strategies: How Proactivity Shapes Value-Creation, Harald Brege investigates the extent to which 27 companies in Östergötland work proactively with innovation, towards both the customers and the market in general. The companies he studied had 10-50 employees and operated in different industries: some selling goods, others services.

Notes on whiteboard.A PhD-thesis explained.

A proactive company is one that tries to be one step ahead of customers and competitors, and takes action based on knowledge. What will the customer want tomorrow, even without realising it today? To be more precise: the thesis defines the term as operations that are characterised by future orientation, taking the initiative and driving change.

The results show that only 50% of the companies investigated can be said to work proactively. The others work as they have previously worked, without a serious will to change.

“You may think that 50% is a low number, but, to look at it another way, it means that there is large room for improvement. What I mean is that nearly all companies would benefit from working proactively”, says Harald Brege.

Haven't got the time

He believes that the main causes are a lack of time and a limit on resources. In the smaller companies, in particular, it is easy to become tied up in the daily operative work, with occasional emergency responses to urgent issues. When faced with Harald Brege’s results, several companies have responded: “Yes, we know. We simply haven’t got the time”.

“I’m convinced, however, that it is extremely important to make time, and think about what the future holds. There’s an incredibly large number of things a company can do that are, in themselves, rather small. What is the company doing to ensure that the customers are satisfied? Has it thought about why it does things in a particular way: is it to create value, or simply a case of old habits?

"Everyone can ask themselves these questions. This is just the start of a proactive way of working.”

In another article in the thesis Harald Brege investigates in more detail five companies that are, in different ways, working proactively. The operations of these companies allow three different proactive marketing strategies, or – to put it simply – different ways of creating value for customers, to be defined.

Three diffenrent strategies

The proactive marketing strategies may be characterised by customer engagement, market shaping, or based on innovation leadership. The first strategy is intended to solve rapidly new needs of the customers, in the best case before they arise; the second tries to change market perception about what the company can deliver; while the third focusses on technical innovation that can change the market.

Harald Brege at Campus Valla."Proactive companies can manage changing surroundings more efficiently", says Harald Brege.

It is often the size of the company that determines which strategy it uses. A marketing strategy based on innovation often requires heavy resources and special expertise.

“This can be difficult for a small company to manage. On the other hand, any company can find out what the customers think, and in this way work with customer engagement. It might be enough simply to ring several customers and just ask them”, says Harald Brege.

Is any of the strategies better than the others?

“No – what’s important is to base the work on the company’s particular situation, and what it is good at. A company that is highly focussed on innovations should follow that line, and maybe not listen too closely to the customers. A company that works with manufacturing in Gnosjö probably can’t radically change the manufacturing industry, but it can certainly follow up its customers’ opinions and try to meet their requirements.”

Are there any disadvantages with working proactively?

“Not really. It does, of course, require a certain amount of resources and it’s a good idea to have a good idea of what you’re going to do before you start.”

Even highly product-focussed and well-established companies in manufacturing industry will benefit from proactivity and considering possible additional services. Maintenance and service can be a source of new income, rentals can supplement sales, and new payment procedures can make financing easier for customers. These are just some examples.

Translated by George Farrants

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