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Being Niche in a World of Composites


Often, being niche in a world of composites gives one a feeling akin to being the last picket fenced house in a row of skyscrapers.

LeadershipTo ace the game of playing niche, there are quite a few lessons that have to be learned:

Lesson 1 – Define what you will do and what you will not. It is essential to come to terms with what you will not do now or in the future, irrespective of pressure from your team or investors. While they are the main influencers who encourage you to go beyond niche, you will still need to get them to understand your chosen niche and its value.  So brace yourself to convince your sales team, who want better ROI and the expansion of services; your delivery team, who would like to catch every item on hype cycle; and your investor, who is interested in above average growth rates.

The best thing to do would be to focus on your customers and respond to their demands in a thoughtful manner.

Lesson 2 – Stick to contextual solution-led client intimacy. Out of the three value disciplines, namely, price leadership, solution leadership and customer intimacy, the niche players have only two options to consider – 1. Solution/Product Leadership and 2. Customer Intimacy. Leadership teams at niche organisations often make the wrong choice of pursuing solution or product leadership, and thus get into innovating at a market/customer segment level. This choice is very expensive and entails building the solution first and then getting into the market. Further, it also has all the risks of market acceptance being pushed to the back.

The right choice for a niche company is to go for customer intimacy as a value discipline and build contextual solutions in close collaboration with existing/potential customers.

Depth in competency/expertise is most useful when built with strong client collaboration. Sales teams in niche organisations must also be groomed in such a fashion that they focus on acquiring new customers or accounts, where they look not only for revenue, but also for a collaboration to build the company’s next niche service.

Lesson 3 – Choose your customer wisely. The choice of going niche is a commitment to focus on resolving stated and unstated pain points that the customer faces. However, we must be cognizant of the fact that all are not our customers, and we must choose only those who are at the forefront of business and technology innovation, keen on solving unsolved challenges in the industry, and place a premium on long term partnership.

So the sales focus should not be on markets and services, but rather on understanding and responding to stated and unstated customer challenges out of a priority prospect/existing customer list.

Lesson 4 – Niche players must have an interwoven delivery, sales and account management structure. It is in fact essential that in a niche setup, acquiring new accounts, or specifically new projects within existing accounts, is as much the delivery team’s responsibility as the sales team’s. The leadership in sales, account management and delivery need to be highly technical, with a definite commercial bend of mind instead of vice versa, as in the case of scale players.

 Lesson 5 – Niche players need to re-invent twice as fast. This is especially true when compared to bigger composite competitors. And there are various corollaries attached to this:

  • A niche player must re-invent offerings and capabilities to stay relevant and ahead of the game, and while doing so, must not choose offerings that are well outside its defined core competency or prone to scale. Offering solutions that combine price leadership and solution leadership is a dream. It is essential to choose one over the other.
  • Investment in IPs - IPs as a rule differentiate the niche offering, and also work towards extending the life of the offering. A niche service offering delivered competently by its people alone will ensure growth only for three to five years; beyond that, an IP that increases productivity or acts as a quality accelerator is a minimum requirement. This paves the way for excellence as we approach a customer with not only complete expertise in the service, but also efficiency that increases productivity and reduces costs, turnaround time and the like.

This IP should be created not as a product, but rather as a solution that is specific to a given customer context. While the IP can be leveraged across customers, that’s not the main objective. The main objective is to increase the competency of the delivery team and achieve the much-coveted customer intimacy.

Lesson 6 – Careers defined by competency. The very definition of careers in a niche organisation must be one led by depth of competency. With a flat structure, growth in a niche organisation will be, to a large extent, horizontal, with increasing accountability and responsibilities in the technical, commercial and client relationship management domains. The traditional conception of careers has always been vertical. If we allow a few principles of vertical career management to seep in, it opens the door for general management-orientation rather than content-led leadership.

Lesson 7 - Retention of talent. Retaining talent in the niche space is also a difficult affair, especially when people are not fully committed to the cause of being niche and investing in customer intimacy. It is easy to be lured by scale, hierarchy and market leadership. Equally challenging is acquiring leaders for a niche setup. If they come from a deeply entrenched composite, scale-oriented setup, then they will find a niche ambience rather stifling.

The formula that all niche players strive hard to get right is one that tackles four big challenges –   one, knowing how to extend the life of niche offerings and build additional offerings that can also be firmly placed as niche; two, acquiring and retaining leadership committed to the niche set up; three,  being able to direct new customer acquisition not only towards selling existing offerings, but also towards selling the next new offering, and four, keeping the team motivated in a career that leans towards horizontal growth.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

About the author

Ranga is a co-founder and CEO of Maveric. In early 2000, Ranga was quick to spot the emergence of independent testing and assurance services as a fast-growing niche area that allowed for a differentiated service offering in an already crowded IT services space. Ranga started his professional life in management consulting. He has worked with organisations like World Bank, American Express, Reckitt and Coleman, Arthur Andersen, Ernst & Young, Polaris Software, AT Kearney, NDDB and the Government of India for close to 15 years in the areas of business strategy, people management, change management and transformational leadership

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