But what if instead of fighting for a slightly bigger piece of the pie, you were able to make the pie bigger—maybe much bigger—overall?
It’s called demand creation and it’s one of the best kept secrets in business
Demand creation is about finding ways to increase the size of the overall market, instead of merely shifting more share to your company within a fixed market. The goal of demand creation is to create more demand in your industry by advancing the category overall—and ultimately capture a very large share of that newly created demand for yourself.
Easier said than done, you’re thinking. How do you actually make it happen? As the former Director of Demand Creation at Owens Corning, I can offer some “been-there-done-that” advice.
Focus on the industry (not your company)
This strategy may seem counterintuitive at first. “Why should we invest our money in making the whole pie bigger” they say. “If the whole market gets bigger, that will also help our competitors. Why would we invest resources to help our competitors grow?”
The skeptics fail to realize two key points.
First, the new demand you create typically generates higher than normal profits, because typically products at the beginning of their life cycle can command higher prices and margins.
Second, the company responsible for enlarging the pie invariably ends up with a disproportionately larger slice of the bigger pie.
Yes, doing things differently can be uncomfortable. If you want to be a market leader, you must become comfortable with being uncomfortable.
Create a culture of possibility
Early on in my demand-creation role, I had the opportunity to work with Gap International, a consulting firm specializing in organizational transformation. The consultant offered a piece of advice I’ll never forget:
“If you have a $10 million business and you want to grow to a $100 million business in you have to start acting like $100 million business TODAY…Merely tweaking what you’ve always done may get you to $12 million or $15 million, but it won’t get you to $100 million. Be bold, adventurous and willing to live outside your comfort zone.”
There’s that theme again.
To make big gains in the market, we had to shift away from our mindset of incremental changes. We had to stop looking at all the things we couldn’t do, and identify big opportunities to take a new approach.
Through research and thinking differently, we were able to re-define our market. Instead of looking at the residential insulation “pie” as two million U.S. homes per year (the historical average number of attics reinsulated per year) we determined that any US home over 20 years old was built with outdated insulation recommendations, and was thus a legitimate prospect for added insulation. This new possibility market reshaped our understanding of the market from two million to 70 million homes! The numbers hadn’t changed, but our view of and approach to the market had.
But first, we had to create a culture of possibility. A culture that actually encourages disruptive thinking.
Disrupt the norm
One reason many companies shy away from demand creation is that it’s inherently disruptive. By its very nature, demand creation will challenge your company and your industry. It requires you to (here we go again) get comfortable with being uncomfortable.
But if you don’t disrupt your industry, it’s only a matter of time before someone else does.
A perfect example of disruption is Uber. The founders looked at the pain points of the traditional taxi service and came up with an alternative way to offer rides (and without owning a fleet of vehicles). Uber is successful because it’s so convenient. No more need to stand in the street waving your arms. No more need to walk to the next corner in hopes of getting away from the other taxi-seekers. No more need to fumble for money at your destination.
So, why didn’t one of the 6,300 existing cab companies disrupt the industry with this brilliant idea? They were too preoccupied with maintaining the status quo.
Not only has Uber disrupted the taxi industry, it’s already being test-marketed to replace some bus services as well. Avoiding change didn’t protect the rest of the industry from disruption. Now the rest of the transportation industry is left to react. And that’s uncomfortable too.
Embrace discomfort…and disruption
The demand creation strategy isn't for everyone. It requires exceptional commitment and tenacity, and generally an internal champion or team tasked with advancing long-term significant change within the organization.
The company that can successfully see the industry as a whole, find the gaps to fill or fix, and create a culture of possibility to deliver unprecedented solutions will disrupt old norms and create new demand.
Disruption is always uncomfortable. But if you can lead it instead of chasing it, you can enjoy a much bigger piece of a much bigger pie.
Ready to unleash awesome? Lets Talk!
Read more about demand creation, the culture of possibility and disrupting the norm in Bill’s book, Diverge: Break Away from Business as Usual. Order it here.