Essential No. 2: Redefine Your Market

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This might not sound revolutionary but it was. After experiencing a deep recession and expecting a recovery in 2003, the enterprise information technology and outsourcing Market was ripe to be redefined.

Corporate IT customers were frustrated. Typical outsourcing contracts were structured to be inflexible and long term, while customers were asking suppliers to revisit their agreements and were looking for more flexible terms. Customers were becoming increasingly vocal to HCL about how their needs were not being met by the global providers such as IBM and Accenture. "When we talked to our corporate customers, we found the market gap to be supplier trust along with contract flexibility and results transparency," explains Nayar.

HCL knew it could win if it could redefine the relationships between the global enterprise customer and the services provider.

Import Ideas from Other Industries

Nayar's team still had to define its breakthrough value proposition (Essential No. 1)—offering one that no other IT company could provide globally. HCL offered flexible contract terms that enabled customers to seek guarantees for service levels and co-source solutions in partnership with HCL. Also, the company focused on quality measures in partnership with customers to ensure they exceeded customer's service level expectations (i.e. availability, response time, achieving milestones on time and budget).

Importing ideas from other industries is a hallmark of successful exponential growth companies. In the case of HCL, the company recognized that it needed to deliver high-quality services through a "services supply chain" of some sort. To do this, the HCL team studied supply-chain systems and processes in manufacturing industries and then reported them through a series of measurements on a real-time IT dashboard.

"We discovered that value is created in the interface between suppliers, employees, and customers. We call this the value zone," says Nayar. Indeed, it was within the value zone that HCL Technologies was certain its real market opportunity lay. By delivering a more sophisticated offering—incorporating infrastructure, applications migration, and design services—HCL could improve the economic return for its customer in more ways than the customer had ever experienced.

Insights to Actions

Trust, quality, and flexibility are the core principles that still define HCL's market. The result has been a five-year compounding revenue growth rate of 63%. As a testimonial to its new global leadership, in January 2009, Nokia awarded HCL a five-year contract to provide global PC desktop support services across 76 nations in 13 languages.

You can redefine your market opportunity by redefining who your customers are or need to be and by identifying their unmet needs. Start this process by asking yourselves the following questions:

• How innovatively are you redefining or identifying market segments that present growth opportunities?

• What insights can you gain from new customers that will enable you to identify which products or services are required to deliver exceptional value to address unmet needs?

• If you can redefine the value zone between your most important customers and your company, can you then create an explosive market opportunity?

Here are three actions you can apply to redefine your market opportunity:

1. Redefine a Stagnant Market by Identifying a Need Gap

Nayar demonstrates that interviewing customers can uncover a potential billion-dollar opportunity characterized by customer's unmet needs. Bear in mind that customers often redefine their needs during periods of economic stress. Quality, trust, and flexibility became increasingly important to IT customers in the wake of the 2001-2003 recession; so much so that three years later, those needs were still not met, providing HCL with great opportunity.

2. Reverse Engineer your Breakthrough Value Proposition

In order to transform a company's growth, one does not necessarily need to start at Essential No. 1: Defining a breakthrough value proposition. In HCL's case, it started with redefining the market (Essential No. 2) and then reverse-engineered the value required in order to capture a redefined market segment.

Periods of economic transition are the time to identify your next growth-market segments even though markets may appear stagnant. Nayar framed the platform for this growth during the last recession by redefining the class of customers HCL would serve. HCL then focused on identifying significant unmet needs within the customer set it desired to serve. To turn these insights into action, it reverse engineered these needs into the services that would deliver the exceptional value required.

3. Focus on Delivering Exceptional Value to a Specific Set of Customers

HCL uses the term value zone to define the intersection of the value the company can provide and the needs of the corporate customer. Defining your market opportunity around your value zone can lead to redefining your market segment through the lens of a specific set of customers. Since economic cycle transitions often serve as an inflection point for changing customer needs, focusing on meeting new customer needs will enable you to identify a high-growth market segment that is underserved.

The next article will focus on Essential No. 3: Leveraging Marquee Customers. If you would to measure your company's performance against each of The 7 Essentials take the free scorecard at http://scorecard.blueprintgrowth.com/. Talk to Dave at twitter.com/davidgthomson or visit www.blueprintgrowth.com.

David G. Thomson is the author of the bestseller Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth as well as a business advisor and keynote speaker. His next books, scheduled for publication in early 2010, are Mastering the 7 Essentials of High Growth Companies and The Next 800 Companies to Lead America's Growth

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