The goal of the ROUNDMAP framework isn’t merely to improve your firm’s commercial performance, rather provide a lens through which to perceive the aspects related to your firm’s commercial growth aspirations and the accomplishment of these aspirations.
First of all, it is good to reiterate that the word ROUNDMAP was composed of two words: roundtrip and roadmap. The word roadmap relates to the strategy execution of the growth aspirations while roundtrip relates to the customer-touching activities that need to drive long-term customer relationships.
We’ve tried to capture these two views into the one image (right) where the roundtrip is presented as an ellipse, while the roadmap refers to the cross-structure strategic execution.
Growth doesn’t come naturally, however, the decline will.
Therefore, we’ll need to aspire to growth to prevent premature annihilation and consider that:
- Growth is either linear or exponential ─ accordingly, we’ll need to forecast earnings and resource allocation.
- Growth has three horizons ─ accordingly, we’ll need a plan to address each of these stages (horizon 1, 2, and 3).
- Growth has to be EQuitable ─ accordingly, we’ll need to contemplate the interests of all stakeholders.
Much can be said about each of these three considerations, however, for now, it is important to acknowledge that growth aspirations are key to enduring growth. They express our ambition while providing meaning and direction, or evolutionary purpose as we prefer to call it, to all of our secondary and primary activities.
Without continual growth and progress, such words as improvement, achievement, and success have no meaning. ~Benjamin Franklin
To illustrate enduring growth we created the following graph. We take it from the top, at the peak of the wave: if we fail to extend growth (green line) it is most common that we’ll hit an inflection point after 1,5-2,5 years, turning a profitable business into a loss=making one. Innovation and change-initiatives (yellow line) need to bridge between future revenue streams and past ones. However, if we plan to survive, adaptation will not suffice: we need to create a future that may include rethinking our entire mode of operation (blue line).
Additionally, you may also have seen the following figure on the front page, in which we’ve plotted the growth projections for horizon 1:
By focusing on Horizon 1, an EQuitable growth projection at a 50% cost-rate could keep the business profitable for about 1,5-2,5 years ─ up to the inflection point. However, when we underperform (blue line), causing a growth gap, the business will not only be less profitable but also reach the inflection point sooner ─ leaving less time for innovation or change-initiatives to develop. The same will occur when we set our ambitions too high (red line) which may backfire if we cause inflicting to our stakeholders.
Next, we’ll need to describe how to accomplish these ambitions while acknowledging that we’re not alone: competition is never far off.
- Demand is mandatory ─ without it, we can’t fulfill a need or relieve pain and as a result, growth will not occur.
- Change is constant ─ nothing remains the same, supply and demand are a dynamic couple.
- Strategy needs to be adaptive or transformative –
Therefore, you’ll need to be able to answer these questions:
- What is the purpose of your business?
- What is your vision statement?
- What is your mission statement?
- What is your values statement?
- What is your business strategy?
- What is your business model?
- What is your (perceived) value position?
- What are your strengths (advantages) and weaknesses (challenges)?
- What is your marketing strategy?
- What is your product?
- What is your market?
- What is your product/brand positioning?
- What are the desired outcomes?
- What are your goals?
- What are your objectives?
- What are your KPIs?
Our framework is to help you achieve your growth aspiration, especially when the operating revenue from your commercial performance does not offset the costs. This is what is commonly known as the Growth Gap. However, what causes poor performance: Is it the story you tell? The promise you’ve made? Your value proposition? Your order process? Your service responsiveness rate? Customer satisfaction rates? Customer retention rates?
Or are you simply addressing the wrong target group? Or do you use the wrong communication channels? Or is your distribution model outdated? Even more, your growth aspirations might have been a bit too presumptuous to start with. Or you may not have allocated enough resources to account for exponential growth – requiring the resources to become available much earlier in the growth process. Furthermore, excessive growth aspirations could backfire as it comes at a high cost to stakeholders ─ suppliers, partners, employees, and so on.
Therefore, we believe growth should be EQuitable to allow the business to thrive.
Now let’s have a look at some of the common causes of what’s keeping firm’s like yours from achieving (or exceeding) the Desired Outcome:
- Corporate Culture
- Risk aversive, fixed mindset (psychologically unsafe environment)
- Restrictive towards employee empowerment (limited autonomy, mastery, or purpose).
- Focused on specialist teams and departments (obstructed cross-boundary collaboration).
- Organizational Structure
- Command and control (formal, strict levels of authority, top-down).
- Process-driven (working towards predictable outcomes; versus agile, project-driven).
- Focused on management rather than leadership.
- Business Model
- Outdated model (based on commoditized markets).
- Driven by economies of scale (mass customization).
- Focused on cost leadership (rather than value creation).
- Bottom-line operation (shareholder value).
- Lack of employee engagement, commitment, and accountability.
- Focused on customer creation (no retention strategy).
- Based on historical data (rather than a continuous feedback loop).
- Siloed systems (data stored in separate databases, information hoarding).
- Focused on gaining market share (rather than customer loyalty).
- Value Process
- The value creation processes does not allow the firm to deliver op promise.
- The value delivered is no longer relevant, up to standard, or matching customer’s expectations.
- The value capture (margin) diminished due to price erosion.
There are a plethora of reasons that prevent firms from achieving their desired outcome(s). To learn what’s causing yours, we’ll need to assess the specific circumstances of all three components of the value orchestration: the Business Dynamics (value creation), the Customer Dynamics (value delivery) and the Market Dynamics (value capture).
We do this by interviewing and observing executives, management and staff, as well as relevant stakeholders, while also studying available data. In a few cases we might even need to obscure some of our activities. We’ll have look at (amongst others) the:
- Organizational structure
- Industry structure
- Corporate culture
- Business model
- Operating model
- Revenue model
- Distribution model
- Strategic partnerships
- Strategic advantages
- Strengths, Weaknesses, Opportunities, and Threats
- Rules and regulations
- Brand/product promises
- Value proposition
- Purchase process
- Moments of Truth
- Customer expectations
- Customer satisfaction
- Customer loyalty
- Customer feedback
- Brand reputation
This assessment will lead to one of three possible recommendations:
- Green Light – The operation may need to be (re)aligned, integrated and optimized, however, there is a clear potential for growth.
- Orange Light – The operation may need to be (re)aligned, integrated, and optimized, and while there is some potential for growth, the trend is negative.
- Red Light – The operation may need to be settled to prevent further losses.
Depending on the indicator, we can now begin to utilize ROUNDMAP™.
Customer Development Stages
The ROUNDMAP™ has 4 Customer Development Stages:
- Customer Acquisition – Find more/better customers
- Customer Creation – Create/convert more/better customers
- Customer Retention – Satisfy more/better existing customers (prefer or refer)
- Customer Extension – Increase Customer Lifetime Value (CLV)
The decision to prioritize on any of these four development stages depends greatly on the chosen business model.
If your firm’s ongoing business model is product-centric, the main objective will be to grow and defend your share of the market. Priorities need to reflect either one or the other (grow or defend) as resources are generally scarce. If your priority shifts towards retaining more customers, you’ll need to have a clear view on what characterizes customer satisfaction and what motivates a customer to return more often.
Research by Manta and BIA/Kelsey reveals that, for the first time (2014), small businesses are investing more of their time, money, and resources on strengthening relationships with existing customers versus acquiring new customers.
Customer Development Operants
These four stages point towards 8 Prompts, each of which is a pathway towards ROUNDMAP’s Customer Carousel:
- Purpose – What is the customer’s job-to-be-done?
- Promise – What is the promise you make?
- Propose – What is your value proposition?
- Persuade – What creates confidence and urge?
- Purchase – What makes ordering convenient?
- Provide – What assures delivery on the promise?
- Please – What defines a satisfied customer?
- Prefer – What motivates a customer to return?
Integrated Customer Lifecycle™
The main objective is not to optimize each and every step of the customer lifecycle, but to align all touchpoints and make it a collective achievement. Siloization is known to destroy separate efforts, while most firms fail to see the impact of each and every touchpoint on the customer’s experience.
There is no easy fix. We may find a single cause, however, it is far more likely that we will uncover many causes, while some may not be found until we’ve fixed the ones we could uncover. The goal isn’t merely to fix what is broken. It is to become aware of what it feels like to be part of a collective that is truly committed to keep its promises to the customers and to delight them on every occasion by exceeding their expectations.