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Business Innovation Brief

The Secret Formula for Achieving Market Leadership


Sep 08, 2017 | Anthony Mills




Unless your business strategy is to be a fast-follower (an increasingly risky and dangerous strategy), you invariably have markets or market segments in which your objective is to be the Market Leader.   As Jack Welch so skillfully demonstrated while he led GE, Market Leadership is the one real strategy that has long-term staying power... anything less tends toward decline (and often diverts resources from being invested elsewhere).   He therefore mandated that GE would be No. 1 or No. 2 in every market it was in, or it would get out.   It was a "Market Leader or nothing" strategy, and it served GE well.

While numerous things have changed since Welch's day, the need to lead has not.   In fact, the need to lead has become increasingly more imperative, considering that so many markets are now changing and evolving far faster than they were at that time, and along with them the market dynamics that define their basis for competition.

It is this change, in fact, in the basis for competition that is now leading to so much disruption in established industries and among established players.   Those businesses simply cannot keep up with the extent and rate of massive structural changes in their markets – changes brought on largely by technological and societal shifts.   These changes are wreaking havoc on their existing business strategies.   One has to look no further, in fact, than what has happened over the past five years in the brick-and-mortar retail industry to see this taking place right before our own eyes.

In response to this, many businesses turn to innovation to solve their woes and problems.   Unfortunately, they do so without any real idea of how to properly leverage and apply innovation to reclaim their lost ground and, more importantly, to stake new ground.   The usual approach is simply to "throw some innovation at it" and hope for the best.

What is lacking is a structured and systematic approach to rethinking their strategies altogether, and likewise the knowledge of how to piece together really good innovation methods and tools to achieve those strategies – all the way through to execution and out the back door, where the new innovations that can lead and reclaim ground will actually see the light of day and achieve their goal.

As a starting point toward such a structured and proper approach, one has to understand the conditions under which breakthrough innovation – the sort that delivers 10X+ value and can actually lead markets – can be realized... the fertile soil, if you will, that allows radical new approaches to take root and bloom.

In general, there are three specific scenarios in which this can happen, namely either:

  1. The market is static, but no one in the market has ever really deeply studied what customers' (or would-be customers') true needs and wants are – the real jobs and outcomes that they're willing to pay more for, and thus no one in the market has ever tried hard enough to develop a real solution to these customers' (or would-be customers') real needs and wants, and then marketed that in a language that resonates with the values and motivations underlying those needs and wants.

  2. The market is in flux – something has fundamentally changed – or is fundamentally changing – about how a particular market operates – its dynamics are in upheaval.

  3. The market is about to be in flux – there is a high likelihood that in the foreseeable future an emerging trend will give rise to a fundamental change in a particular market, resulting in an upheaval of its dynamics.



When any one or more of these three scenarios are true, then the conditions are right to introduce a radical, breakthrough innovation that will fundamentally change the basis for competition in that market.   Savvy business leaders know this, and know how to recognize these conditions when they happen.   Just as importantly, they know how to jump on the opportunities they represent to define and deliver the sort of innovation that will capture the new dynamic – the new basis for competition.    

The most aggressive leaders, in fact, actively drive these sorts of radical structural changes in markets, rather than passively waiting for them to occur.   This all but guarantees their ability to claim the leadership position in those markets.   Such is the strategy that Amazon has been following in recent years.

In either case – whether actively driving changes or responsively adapting to changes – the secret to winning here is nothing less than fundamentally rewiring the basis for competition in a given market.   Leaders do not compete on the same basis that everyone else in that industry competes!   They find a stronger, more compelling basis for competing and then deliver to that, as well as market on that.   This is precisely what Apple did when it stopped talking about computers in technical terms and started talking about them in emotional, lifestyle terms... they fundamentally changed the basis for competition in that market.

This same approach can work in any industry!



  1. Change the offering and the experience — Figure out what it is that your customers and markets really need and want, and then give them something that produces those outcomes in a fundamentally different and better way!

  2. Change the message — Stop talking about things your customers and markets don't care about (often functional, technical things), and start talking about the things that your customers and markets actually do care about.   And tell them about these in a way that matters to them!   All offerings deliver value in three ways... functional, emotional, and social.   It is the emotional and social that usually wins customers over, not the functional (though the functional needs must be fully met).   Therefore think about what matters to your customers emotionally and socially... is it lifestyle, status, security, opportunity, or what?   Figure out what that is, and then talk about what you offer in that language!

  3. Change the business model — Again, figure out what outcomes your customers and markets truly need and want, and then find a new and better business model that can better resonate with their big picture needs.   That business model will often look nothing at all like your current business model.


All three of these require knowing each customer segment inside and out... figuring out what their deepest and truest outcome needs and wants are — what we call an empathic understanding.   This is where the mix of Design Thinking, Outcome-Driven Innovation, and Customer Experience design truly shines!   Taken together, these three methods allow one to develop a deep, empathic understanding of their customer (or would-be customer) and to deliver new solutions that meet all of their needs in a far better way than current offerings can.

In summary then, this is the secret formula for ongoing market leadership...



  1. Using the right combination of innovation methods...

  2. When the conditions are right...

  3. To change whichever will deliver the greatest leadership with a new, better basis for competition – the offering and the experience, the message, or the business model – or all three.



When a business applies this formula in the right way, at the right time, with the proper skill and precision, then it can in fact deliver the radical new value that lets it stake a claim of market leadership in its industry.

The prize goes, therefore, to those businesses who master these insights and methods and thus learn how to use them effectively.   They are the businesses who will ultimately become – and remain – the market leaders.

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