Where can new growth be found when the market changes?

A long history can be a competitive advantage if a company is able to distinguish its lasting purpose from its current products and operating models. In the second episode of Alma’s Sustainable Growth Accelerator video podcast discussion series, When markets reorganise, Susanna Takkunen from Accenture Finland and Santtu Elsinen from Alma Marketplaces discuss how companies that find growth define themselves through customer needs and build new capabilities around their existing core.

Market leadership does not protect against change

The biggest risk for an established company is trusting that today’s excellence will also carry it into the next market. Success can easily reinforce product-centred thinking: the product is improved even when the customer’s problem, distribution model or value chain is already changing.

According to Susanna Takkunen, Managing Director of Accenture Finland, companies capable of renewal recognise that the same model that brought them to their current position will not necessarily take them forward. This insight requires leadership to challenge its own success before external pressure makes change unavoidable.

“Competition no longer comes from the same industry. It can come from somewhere completely different,” Director of Alma Marketplaces Santtu Elsinen notes.

Identity can expand without losing the core

In the discussion, Takkunen cites L’Oréal as an example of a company that redefined itself from a beauty company into a beauty tech company. The change did not abandon beauty as the company’s core. It expanded the way the customer problem is solved through technology, data, digital channels and new products.

What mattered was long-term commitment from leadership. The new direction was embedded across the organisation over several years, experimentation was given room, and capabilities were also built through acquisitions and investment. The new identity began to show in the offering, distribution, analytics and customer experience.

“Successful companies identify the need. They do not start from the idea that they have a superior product that simply needs to be adapted to the future”, Takkunen says.

Define the problem to be solved, not the product

When a company defines itself through its product, renewal is easily limited to improving the current offering. When the starting point is the customer need, more options emerge: a new service, a distribution model, a partnership, data-based revenue, or an entirely new position in the value chain.

This does not mean unlimited expansion. Leadership must identify where the company’s capabilities, brand and customer relationships give it a credible right to operate. The place for growth is found at the intersection of a lasting core and a changing customer need.

Finland’s opportunity is to combine technical expertise with a needs-led approach

Takkunen sees a strong start-up field and a great deal of technical expertise in Finland. The challenge is also to get companies with a long history to build new business alongside their current operations. Traditional accelerator models or separate start-up collaborations do not automatically solve the task if the parent company’s decision-making, targets and funding logic do not support a new way of working.

In practice, renewal requires identifying new target groups, parts of the value chain and ecosystems. Technology can accelerate change, but growth begins with the question: which customer problem can we solve better than before?

This article is based on a discussion in Alma Media’s Sustainable Growth Accelerator video podcast, where Susanna Takkunen, Managing Director of Accenture Finland, and Santtu Elsinen, Director of Alma Marketplaces, examine market reorganisation and companies’ ability to renew themselves. Watch all episodes here (in Finnish).

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