Guerrilla Growth: Surprise Tactics For Stagnant Markets

Tuesday 19 March, 2013

by Steve Lennon

There's no doubt, growth isn't as easy to come by as it used to be. In more buoyant markets, above-the-line marketing drove brand awareness; customer loyalty programs stimulated sales and shared service platforms enabled cost reductions. In today's stagnant markets, these tactics are losing their edge.

Revenue growth stalled? Profit margins under pressure? Debt levels prompting more frequent conversations with your bankers? Running the ruler over staff numbers and looking for 'headcount reductions'? In more buoyant markets, above-the-line marketing was a potent tool for driving brand awareness and market share; customer loyalty programs could stimulate sales; business process improvements and shared service platforms enabled cost reductions flowing straight to the bottom line. In today's stagnant markets, constrained by negative consumer sentiment, clouded by an uncertain economic outlook, and ravaged by disruptive upstarts attacking industry profitability, these well-known tactics are losing their edge. 
As they became commonplace, each of these tactics earned their own beloved TLA: CRM, ERP, SCM, BPR, SFO, SEO, SFO, BPO and so on. We all knew what they were; we knew they needed to be done. They could be delivered with the benefit of industry best practices, and targeted to deliver an acceptable ROI.
Business leaders today need to get to know a new suite of tactics. Ever heard of these acronyms? ETA, FARC, FLNC, IRA, ANC, PKK, PLO? These are guerrilla organisations that have employed a distinct repertoire of communication, combat and leadership tactics to confront larger, better resourced and more established rivals.
Today, achieving meaningful growth in revenue and earnings requires just such an approach, challenging much accepted management wisdom. For a start, which of these two forecast growth curves would you want to present to the board and shareholders?
 
Of course, you want to promise the 'no surprises' option. Year-on-year growth in share price and dividends, comfortably exceeding the relevant stock market benchmark with low volatility.
In reality, growth today may mean going backward, reverting to simpler solutions at a more affordable price point. Moving sideways into adjacent markets. It may be hiding in plain sight, waiting for you to uncover the unmet needs of existing customers. Growth might mean shrinking, shedding certain products and business processes, now, that won't be critical to your customers in the future.
Sure, many bankers and economists will tell me earnings volatility matters a lot. But what if our efforts to produce smooth, above-trend growth strangle the very sources of enduring business success in the process - creativity, risk-taking and innovation? The quickest path isn't always the best path.
A long period of sustained economic growth and our natural human cognition have trained us to see the business world in straight lines. One year builds on the next. Markets expand in a predictable manner. There is right and wrong, good and bad, left and right.
Today these clear distinctions are all being blurred. In an environment where societal boundaries and values are constantly shifting, technology is rapidly advancing and markets evolve in more radical and unexpected ways. Consider:

• Wii: physical or virtual?
  
• Social media: expensive distraction or invaluable business tool?
  
• Unique website visitors per month: profit or loss? asset or liability?
  
• Retail stores: white elephant or web complement?
  
• Corporate culture: unmanageable myth or critical business asset?
  

Enter guerrilla organisations

Guerrilla organisations operate in just such messy, ambiguous conditions. Even under sustained pressure, they will almost never contemplate 'headcount reductions'. When faced with a tight squeeze, they continually find novel ways to fight their way forward. Guerrilla tactics have evolved to successfully confront and disrupt established powers, with inferior financial resources and vastly lesser manpower.
Che Guevara wrote a short book published in 1961 called Guerrilla Warfare, right after the Cuban Revolution. Guevara intended it to be a manual on guerrilla warfare, but the book was also studied by counter-revolutionary military schools.
He stresses the need for an underpinning political motivation to guerrilla methods, organisation and supply. He defines guerrilla warfare as tactics "used by the side which is supported by a majority but which possesses a much smaller number of arms for use in defence against oppression".
A guerrilla struggle usually involves a small, mobile force, depending on the support of the local population, exploiting terrain most suitable for living in hiding. Tactically, the guerrilla avoids confrontation with large units of enemy troops, seeking and eliminating small groups of their soldiers to minimise losses and exhaust the opposing force. Not limiting their targets to personnel, enemy resources are also preferred targets.
The guerrilla's aim is to weaken the enemy's strength, rendering them unable to prosecute the war any longer, and to force their withdrawal. Guevara asserts that the guerrilla approach "necessitates acting at certain moments in ways different from the romantic and sporting conceptions with which we are taught to believe war is fought." Here then are some of the key lessons we can learn from Guevara's guerrilla advice:

1. Practice reciprocity and respect
   
   "A fundamental part of guerrilla tactics is the treatment accorded the people of the zone. Even the treatment accorded the enemy is important... Survivors ought to be set free. The wounded should be cared for with all possible resources at the time of the action. Conduct toward the civil population ought to be regulated by a large respect for all the rules and traditions of the people of the zone, in order to demonstrate effectively, with deeds, the moral superiority of the guerrilla fighter over the oppressing soldier. Except in special situations, there ought to be no execution of justice without giving the criminal an opportunity to clear himself."
   
   Build a strong, shared sense of mission, which can sustain your people in good times and bad. This mission must be clear enough to guide your people's actions when enjoying success, and to foster solidarity when under pressure. The conduct of your people when dealing with customers must be distinguished by such integrity and reliability that alternate suppliers are exposed as merely self-interested.
2. Acquire deep, localised knowledge
   
   
   "When we analyse more fully the tactic of guerrilla warfare, we will see that the guerrilla fighter needs to have a good knowledge of the surrounding countryside, the paths of entry and escape, the possibilities of speedy manoeuvre, good hiding places; naturally, also, he must count on the support of the people."
   Establish a fine-grained understanding of the competitive territory in which you are operating, sufficient to create a point of view about their likely future tactics and how they will impact on the customers you serve. Find out what is impacting the business condition and performance of your customers, up and down the supply chains in which they operate. Look for the gaps you can profitably exploit as your customer's needs evolve, especially at the edges of existing product and market boundaries.
   
3. Protect and deepen relationships
   "All this presupposes an increase in the territory included within the guerrilla action, but an excessive increase of this territory is to be avoided. It is essential always to preserve a strong base of operations and to continue strengthening it. Within this territory, measures of indoctrination of the inhabitants of the zone should be utilised; measures of quarantine should be taken against the irreconcilable enemies of the revolution; all the purely defensive measures, such as trenches, mines, and communications, should be perfected."
   When securing new market territory for your products and services, embed new values and behaviours with your customers and establish strategic defences around your relationship, before moving on to the next objective.
   
4. Be flexible and agile
   "A fundamental characteristic of the guerrilla soldier is his flexibility, his ability to adapt himself to all circumstances, and to convert to his service all of the accidents of the action. Against the rigidity of classical methods of fighting, the guerrilla fighter invents his own tactics at every minute of the fight and constantly surprises the enemy."
   Create a holarchical structure, comprising many smaller units, with authority devolved to the front line and information flows enabled in every direction, in real time. Adopt a dynamic strategy, exploring many tactical options in parallel, and pressing your advantage when opportunities arise.
   
5. Build from strengths
   
   "When the guerrilla band has reached a respectable power in arms and in number of combatants, it ought to proceed to the formation of new columns. This is an act similar to that of the beehive when at a given moment it releases a new queen, who goes to another region with a part of the swarm. The mother hive with the most notable guerrilla chief will stay in the less dangerous places, while the new columns will penetrate other enemy territories following the cycle already described."
   
   Focus on building new businesses based on the strengths of existing ones, taking the core skills and values and leveraging them into new markets. Where necessary, this may mean actively dismantling the predecessor business and redeploying its resources.
   

Guerrilla growth calls for more nimble, point-to-point thinking. You don't need to turn your organisation upside-down and throw it into complete chaos. You will need to sustain operational and financial discipline in delivering products and services; you cannot afford to indulge every tactical whim that your newly-trained guerrilla forces suggest.
You will still need a strategy. But the primary purpose of your strategy is to provide a broad context to align and coordinate action at every level across the organisation, rather than specify what people should be doing. Your strategy - meaning overarching story - needs to stoke the 'underpinning political motivation' for your operational methods, organisation and supply that Guevara speaks of.
What you need is a powerful, mutually-reinforcing combination of guerrilla growth tactics and operational excellence. This will require people to be more flexible; to understand the need for two modes of thinking and action. It will mean breaking down traditional silos and hierarchical thinking; it will mean senior people letting go of complete control. However, imagine the value of transforming your organisation such that it has each of these qualities at once:

• Dynamism and stability: providing clear direction that invites innovation and continuous improvement
  
• Creativity and ruthlessness: building new businesses and dispassionately dismantling old ones
  
• Functional hierarchy and entrepreneurial freedom: maintaining requisite governance with freedom of action at local levels
  
• Reciprocity and individual boldness: fostering strong teamwork and information sharing that also supports people to take risks and explore new ground individually

The foundation for achieving this special marriage of skills and attitudes is the passion and commitment of your people. This is what enables small bands of poorly equipped fighters to gain the support of a majority and ultimately defeat superior forces. You will need an engaging story - a mission - that will fire the creative spirit, harness collective energy, and encourage people to equip themselves with new skills and tools.
Times may be tough. But before you press the button on firing people, consider Guevara's tactics. They may help you find surprising new ways for your people to gain competitive ground, creating value for your customers, your organisation and its shareholders.



Source:ceoonline.com