Solutions Strategies

“Solutions” has become a popular one word strategy descriptor for many firms. When faced with little headroom for growth, companies often look to move into a larger available market space by expanding into adjacent products categories, by adding next generation intelligence to these products, and/or by expanding into services which complement and/or connect to those products.  These additions to a firm’s offering are frequently called “solutions.”

Blue Canyon has identified three critical steps for firms as they develop successful “solutions” offerings. (For further detail and examples of successful implementation see the recently published article Solutions to Growth Challenges) :

1. Understand your customer. Aim to know your customers at least as well (and perhaps better) than they know themselves. By developing a full understanding of these customers and their business environments, and the changes taking place for both, suppliers can bring solutions to problems (or opportunities) that customers didn’t even know they had.
2. Build confidence. It is crucial to convince your customer that you are able to deliver the value promised by your solutions concept. The customer must be willing to trust the supplier with an expanded set of responsibilities, including roles that have been previously assigned in-house or to other suppliers. That willingness will only be there if the supplier has proven their ability to deliver.
3. Blend—don’t bundle. The best solutions offerings are ones in which the components are meaningfully connected and blended. Otherwise, the solution is merely a bundle and is vulnerable to cherry picking from competitors and purchasing executives.  Think of your solution along the line of the chemist’s definition of a solution. It should be a homogenous mixture of multiple elements that differs from its ingredients— salt water not water and salt.  

There are many valid reasons for including “solutions” among the strategies for growth in the future years.  However, electing a solutions strategy should only be done when there is confidence that the three capabilities described above can be addressed.  Those firms whose solutions strategy builds on these foundations will be those that delight their customers and reward their shareholders as a result.