Result of losing focus on your strategy

If you’re anything like me, you much prefer learning from other people’s mistakes. When you’re able (and willing) to look across industries you’ll find even more lessons from other people’s mistakes. Just because you’re not in the fast-food business doesn’t mean McDonald’s pain can’t become your gain.
“After losing about 500 million US orders over the past five years over failed attempts to widen its customer base, [McDonald’s] said it is going to embrace its identity as an affordable fast-food chain and stop chasing after people who will rarely eat there.” (The Wall Street Journal, March 2, 2017)
Wait, the unintended consequences make it even worse. “One of its biggest challenges has been getting its burger offerings to resonate with people who have grown accustomed to better burgers from rivals.”
The Cliff Notes version: McDonald’s spent so much time and effort trying to woo people who aren’t attracted to McDonald’s that many of their best customers strayed to other chains with better burgers. Now, McDonald’s must improve their product in hopes of winning these customers back.  Wow, talk about bad breaks. What could they have done differently?

X Marks the Spot

McDonald’s blew it when they stopped focusing on their core customers and why those customers choose McDonald’s over the many other choices. For those reading who are current or past clients, we’ve had this conversation, so you know what happens. The management team gains insights into how to serve their core customers better and how to attract more customers like them. They grow by doing what they do best. Focus transforms their business into one which is operationally less complex and more profitable.
Could such a strategy be successful for McDonald’s? The fanatical following of the crossed palm trees of In ‘N’ Out demonstrates the potential of a burger chain focusing on what they do best.

In-N-Out.jpg

Your firm is more like In ‘N’ Out than McDonald’s. Growth is swell, but boosting profits, running an operationally efficient organization, and maintaining a strong and distinct firm culture are likely your top your priorities.

​Upside Opportunity

Chances also are very good that your market is less saturated than the fast-casual market for burgers. In my experience, focused firms discover plenty of upside opportunity–generally, more than they think. McDonald’s took the painful path, so you don’t have to. You don’t have to master a bunch of new tricks to grow–especially if you prioritize high profit growth ahead of raw revenue.

When I work with a firm to uncover why their best clients select their firm, I almost always find opportunities to increase profitability. Not the fleeting, stick-it-to-your-clients kind of profit growth; the enduring kind where the client conversation revolves around your impact on your client’s business.

I have countless stories of customers paying larger invoices while still feeling they’re getting a great deal. It’s the difference between being hired for a tactical need versus being recognized as an invaluable adviser to the business leader. Clients will pay for that.

A Huge Impact

True story: Over lunch I offered a wealth adviser in my professional networking group a tip. The next time I saw her she was really, really happy, crediting my advice with helping her land a $10 million client.

What was my advice? Stop trying to be “different,” and instead focus on why and where she is the best choice for the clients she most wants to serve. The challenge for firms is the why and where aren’t always obvious.McDonald’s could have benefited from similar advice. While I don’t expect McDonald’s to call me, I’m a great option for a lot of other firms looking a growth strategy to make them the In ‘N’ Out of their market.