April Question of the Month: The biggest drivers of business success for different industries
Each industry relies on different factors to drive business success, increase profit, raise reputation and maintain business growth. It’s a question not far from the minds of leaders who want to drive this success, but can be difficult to pin down. So, last month we asked our network what they thought are the biggest drivers within their industries and have analysed the results to see the changes are and why this could be.
The overall results came out as innovation and employees stand out as the top drivers for the main industries of Financial Services, Professional Services, Retail and Ecommerce, and Consulting.
Company values 18%
We had a further look into the reasons behind this and how companies can boost business success with employees and innovation- have a look here.
However, by breaking the percentages amongst the different industries there are some other interesting take outs from this data. Take a look at the breakdown by industry:
Firstly, it is clear that for professional services and financial services jobs, employees are of prime importance. This makes sense as these industries rely on the specialist tertiary skills of employees that offer their services to clients who need projects carried out. The employees, in this case, are the valuable asset of the company or 'product' that is driving the business. The Harvard Business Review emphasised that the skills of the employee and their interpersonal relationships will always be paramount in these sectors because clients must evaluate the person they are talking to rather than a tangible good. This also means that purely ability or purely personality are not enough – employees in these sectors must be 'a professional who can also sell' rather than a 'professional salesman'.
However, financial services industries ranked innovation very close behind employees – perhaps because employees drive the innovation so could be considered under a similar category. Also, company values ranked highly which shows that employees may be looking at different things from their company – perhaps fun workplaces as analysed here. In fact, Fortune.com made a list of the best workplaces for professional services which cover a lot of different values from employee growth, youthful recruits, motivating enterprises or excellent pay. This shows that some respondents might have particularly appreciated the specific values of their company.
Indeed, recent research suggests that purpose driven businesses with clear values are the most successful. An organisation without purpose manages people and resources, while an organisation with purpose mobilises people and resources. Purpose is a key ingredient for a strong, sustainable, organisational culture. It’s an unseen-yet-ever-present element that drives an organisation. In the book Corporate Culture And Performance, John Kotter and James Heskett show that over a decade-long period, purposeful, value-driven companies outperform their counterparts in stock price by a factor of 12. In the absence of purpose, a company’s leadership is likely to have greater difficulty in motivating employees as well as connecting with customers. So company values may have ranked highly with our professional services respondents as it is part of what makes a business successful.
In the consulting, communications and media industries though, innovation was the clear winner for driving business success. Innovative thinking is needed by consultants to problem solve for their clients and media, of course, relies on new ideas to grab attention in the ever growing forms of new technology that are evolving. PWC's 2014 Communications sector report also singled out innovation and collaboration as the key to the future as well as a warning that technology shifts were affecting the value of content and its distribution. PWC advocated for the need to move from creating impressions to building relationships with consumers, particularly through the online video, social and mobile media that are only rapidly expanding and cannot be ignored. Innovation is key at this stage when so many aspects of these new technologies are still evolving.
However, the most interesting result is that the retail industry ranked innovation rather than product as their top driver. In fact, nobody at all chose product in this industry which is the opposite of what we expected! With this in mind, the result clearly shows us that the changing markets of today have changed the way retailers must think. The innovative ways you take products to market, craft their unique selling point and what brands are associated with them, along with the marketing mediums used to distribute the message of the new products are far more important than the product itself.
Indeed, a recent Harris Interactive survey showed that 88% of customers prefer doing business with a company that offers quality customer service over a company that has the latest and most innovative products. Likewise, 69% of customers switch brands due to real or perceived poor service, with quality being cited as the reason by only 13% of respondents, according to a Michaelson & Associates study.
Therefore you can have a great product but it has to be innovatively marketed with customer experience at its heart, particularly as retailers are becoming increasingly pressured to lead the Omni-channel revolution; see our analysis of this here.
The results of this Question of the Month, therefore, are revealing in the way in which data must be really broken down in order to get a clear picture of the nuances behind peoples responses. Instead of employees and innovation being the definite drivers of business, it depends on which industry you ask.