I had a Breakfast meeting with a colleague recently and we discussed a couple of my recent projects. Listening intently, he then asked me if I had ever heard of ‘Parenting Advantage’ because, he said, “it sounds like that is exactly what you bring to your clients”.
Intrigued, I set about to research the latest literature and found several articles, many of them dating back to the ‘80s and ‘90s, describing Parenting Advantage and how one could extract it. The concept principally relates to companies that have several Divisions, Business Units or Product Streams, all sitting under a collective ‘Parent’ or ‘Group’.
The simplest way of understanding the concept is to ask the question, “Are there advantages to be had such as revenue, profit, shared resources and customers by having a collection of businesses under a Parent? Or could each one operate just as effectively as a stand-alone unit or in a different Group?”
Practically speaking, a parent could provide cost effective services for all units including accounting, marketing, IT etc. And the units themselves could potentially share leads and customers to bring about more holistic solutions to all customer challenges. The trick is to maximise BOTH the stream performance and the cross-stream performance without one destroying the value of the other. It demands a very clear understanding of clients and their needs so that the divisions and the parent can offer a ‘pick and mix’ range of solutions that fully, as opposed to partially, solve their challenges.
The reason this is so effective is that each business unit typically only serves customers with its own range of products and services. By considering the wider needs of the customer, value is created by inviting other business units to participate. In a more mature model, this involves the creation of a matrix of Group Key Accounts, Stream Key Accounts and perhaps National or Regional Key Accounts. Individuals in these teams typically have dual roles, one in Group and one in Stream. With these key principles firmly in mind I help clients create their own ’Parenting advantage’.
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