Why are there not more great companies?

A too-rarely asked question I believe is ‘Why are there not more great companies?’ It is certainly not due to a lack of executive ambition, investor capital, breakthrough technologies or ideas. After numerous positions working in C -Suite and then building a successful strategy consultancy,  I have come to the conclusion that a clear understand of go-to-market (GTM) is the missing link and here’s why.

Clarity about go-to-market

This Peter Drucker quote provides the necessary context: “There is only one valid purpose of a corporation – to create a customer.” Companies don’t create a customer unless that customer has purchased their offering, and a customer won’t do that unless they first believe it will satisfy an unmet need.

Conventional wisdom often equates GTM with commercialization, where the latter involves issues that typically arise in the months prior to launch and then continue forward from there.

I intentionally use the GTM phrase to remind executives how it is necessary to have an externally focused, customer-oriented mindset from the inception of every new business initiative. Used this way, GTM links together the two key priorities of first proving compelling customer value is being created and only then pursuing commercial growth.

The proper GTM strategy mindset

Getting GTM right also requires executives realize they have no control over the three groups – investors, corporate partners, and customers – whose independent actions in the marketplace will determine whether their company realizes the dominant valuation and operating performance outcomes necessary to become a great and enduring company.

That means executives are in the persuasion business, where they need to persuade all three groups to care enough to invest, partner, and buy.

What GTM strategies are not

GTM strategies are the means of persuasion. However, most executive teams instead focus on developing plans (even so-called strategic plans!) which, by themselves, will not persuade. Why? Because, as Roger Martin has said, planning is not strategy. Said another way, plans describe what Martin calls a “laudable list” of internal management activities which are under their own control (e.g., like program initiatives and spending commitments) while GTM strategies describe choices for how the company will “compel [desired] action[s]” by external groups who are not under their control. Martin describes the difference as being “analytics obsessed…[versus]…output-driven…[where management’s]…task…[in the latter]…is to formulate a set of choices to compel…[that]…action.”

Robust GTM strategies enable strong GTM performance

As a unified field theory of business, GTM strategies serve as the foundational power train that drives delivery of meaningful GTM performance. Such performance is impactful because it has first been validated through directly engaging the marketplace in ways that lead to the product-market fit, business-model fit, and organizational fit solutions that together represent a comprehensive GTM strategy capable of winning in a defined competitive marketplace.

GTM strategy work begins early

GTM strategy work also needs to start far earlier than most executives realize. Great companies have a habit of beginning GTM efforts when they have a raw unproven technology and an unvalidated hypothesis about an unmet market need. What follows is an ongoing tug-of-war dialogue between the technology and marketing teams that never ends until either the project is killed or the product is retired.

The existential challenge faced by all executive teams

In my consulting work, I have seen far too many executives follow conventional wisdom and default to planning instead of digging deeply enough from the beginning to find the GTM levers that will persuade investors, partners, and customers – and only then developing plans capable of delivering strong GTM performance because those levers are explicitly embedded in them.

The price of following conventional wisdom is steep and jarring, e.g., one study showed 72%of all new products flop. Other studies show similar failure rates.

Leading with GTM strategy development instead of plans requires a mindset change by executives that recognizes“all data is from the past…There is no data about the future – ever.” It means they must stop being “too busy” and find the time to lean into making informed judgment calls after wrestling with uncertain prospective external marketplace dynamics.

That change will often be unsettling, and it certainly isn’t easy. But placing such calculated bets to create a new future is the contrarian price of admission to the build-a-great-company game.

My challenge to executive teams: Is your desire to build a great company strong enough that you are willing to be a contrarian outlier among your peers?

To assist executives who are bold enough to embark on such a GTM journey, I developed the novel 3×3 GTM® Road Map shown at the top of this article. The Road Map identifies the individual levers that should guide the development of robust and customized GTM strategies, as I explain in this recent talk.

The world needs more great companies that provide compelling value to customers, meaningful work to employees, and strong returns to investors. Getting GTM right is the purposeful pathway to realizing such impactful outcomes.

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