That’s probably a very different kind of company from the one you find yourself in today. But if we are going to win in the new demand economy, this is what all of our companies will look like in the very near future. And even after we’ve made this transformation, we will still have to devote more time and energy than ever to maintaining it, because human beings are complicated and mercurial and a demand chain that is accurate today may be misdirected tomorrow.
We have before us a great opportunity. Supply wildly outpaces demand right now. The global economy has become unbalanced. And we are going to find the path to win in this new environment. We have the chance to carve out high profit and defensible markets, and enjoy first mover advantage.
It goes without saying that there’s a learning curve attached to change of this scope. But you have a choice: you can tweak your current operations or you can lead your company to a new business model aligned with the times. It will be a discovery process that every contemporary CEO and leadership team—not least of all your competitors—must go through. So the sooner you get through it, the bigger your advantage will be. You can’t copy discovery; there is no shortcut. Every company is going to have to navigate its way through this process, cutting its own path. This book is the first step in that discovery process.
It has always been true that the biggest success stories emerge from times of change. Where weak leaders see uncertainty, the confident leader—armed with a smart and differentiated strategy—creates new opportunities to win. This is such a time. And the winning companies will be defined by leaders who fully understand that the time for change is now, and that the opportunity to win has never been bigger or better.
In the pages to come, we will introduce our vision of this demand driven company. It is the product of more than a decade of work since we first identified the demand economy, and it has been tested in the crucible of real life business in our work with scores of the world’s largest companies. We’ll offer examples and case studies of some of the most compelling of these stories in the chapters to come.
For now, what is important to understand is that we believe—and we intend to convince you as well—that demand strategy is an idea whose time has come. That it offers a powerful response to the unprecedented new challenge we face in a world of flat to contracting demand. Further, that we believe that the demand chain will take its place and be an equally powerful complement to the supply chain—that, in fact, you can no longer have a truly efficient supply chain without an equally healthy demand chain. And that ultimately, the combination of the demand chain and the supply chain will take a premiere role for how companies win in the twenty-first century.
In addition to proposing a new demand based business model, we will share with you a whole new palette of demand management tools, such as mental modeling and the “thesis for winning,” already being used by some of the world’s most admired corporations. With these tools, which interlink along the demand chain, you will be able to harness demand and turn it to your profit.
We hope that at this point we have you intrigued, if perhaps not yet convinced, about the demand chain and its implications for helping you win. Now let’s see how it’s done. We’ll start with one of the first big success stories of the new demand driven economy: How did McDonald’s, a troubled and aging company just five years ago, manage to find new life, continuous growth—and new profits?