Proximity: The Advantage in Getting Closer to the Moment of Demand

Lis­ten to the Arti­cle (5:50)

Based on my recent inter­view with Kai­han Krip­pen­dorff, author of ​“Out­think the Com­pe­ti­tion” and the forth­com­ing ​“Prox­im­i­ty.” The sec­ond in a three-part series drawn from that conversation.

I recent­ly caught up with Kai­han Krip­pen­dorff, the author of six great books, includ­ing one of my favorites Out­think the Com­pe­ti­tion. He told me about his new book, called Prox­im­i­ty, and as he start­ed to explain it, it real­ly got my atten­tion. It’s a gen­uine­ly dif­fer­ent lens on strate­gic think­ing, and one I appre­ci­at­ed. Here’s the main idea.

Kai­han’s start­ing point is that so much is chang­ing at once, AI, cheap­er sen­sors every­where, an explo­sion of data, robot­ics, 3D print­ing, that it’s easy to feel over­whelmed. But he argues that all of it points to a sin­gle shift, which he calls prox­im­i­ty: val­ue gets cre­at­ed clos­er and clos­er to the moment of demand, in both time and space.

The Old Mod­el Is Under Pressure

For most of busi­ness his­to­ry, you cre­at­ed val­ue by com­bin­ing things ahead of time: sourc­ing, man­u­fac­tur­ing, assem­bly, dis­tri­b­u­tion. You pro­duced in one place, stock­piled, and pushed prod­uct through a sup­ply chain toward the cus­tomer. The fur­ther you pushed that mod­el, the more effi­cient it looked.

That instinct is now work­ing against you. The old move was to com­bine every­thing ear­ly and hope demand showed up. The new one, in Kai­han’s words, is to wait and wait and wait until you know there’s real demand, and then you com­bine. Same val­ue, cre­at­ed much clos­er to the moment it’s actu­al­ly needed.

Two Ways to Look at It

Prox­im­i­ty takes many forms across every sec­tor, so it does­n’t reduce to a neat for­mu­la. But when you’re decid­ing where to act, two angles are the most use­ful, and it helps to hold them apart.

The first is prox­im­i­ty of time: com­bin­ing things quick­ly, so val­ue comes togeth­er clos­er to the moment the cus­tomer needs it. Kai­han’s line stuck with me. You don’t have to get all the way there, you just have to get thir­ty sec­onds ahead of your com­pe­ti­tion. That’s what Uber under­stood. It did­n’t sell a faster car, it sold the feel­ing that your car start­ed com­ing the instant you tapped con­firm. McDon­ald’s plays the same game on time: from the moment you’re hun­gry to the moment you’re back on the road, it’s min­utes. The win­ner is who­ev­er col­laps­es that gap.

The sec­ond is prox­im­i­ty of loca­tion: com­bin­ing things close to where they’re need­ed, instead of far away and far in advance. Food grown in ver­ti­cal farms near the point of demand. Replace­ment parts 3D print­ed at cen­ters close to where they’re installed, rather than ware­housed as thou­sands of SKUs. The Coca-Cola Freestyle machine is the clean exam­ple, com­bin­ing syrup and soda right there in front of you instead of in a bot­tling plant hun­dreds of miles away.

Same under­ly­ing shift, two dif­fer­ent gaps to close. For a lot of busi­ness­es, and espe­cial­ly ser­vice busi­ness­es, the time gap is the big­ger prize.

The Ver­sion I Saw in Our Own Firm

Kai­han walked me through this using our own busi­ness, and it changed how I see what we do.

He asked me to name the exact moment the need shows up for a client. It’s usu­al­ly a CEO walk­ing out of a meet­ing that went bad­ly, frus­trat­ed, think­ing there has to be a bet­ter way. That’s the moment of demand. Then he asked me to pic­ture the walk from the board­room back to that CEO’s office. What if, in the time it takes to walk down the hall, we could com­bine the six or sev­en things we bring to a client (the research, the finan­cials, the team dynam­ics, the IP) so they sit down already clear and confident?

Today there’s a real gap between that moment and when we can engage. The need sur­faces on a Tues­day, and the work hap­pens at the next sched­uled ses­sion, maybe month­ly, maybe quar­ter­ly. Prox­im­i­ty says close that gap and syn­chro­nize with the client while the issue is still live, while they’re still walk­ing down that hall. Same exper­tise, deliv­ered far clos­er to the moment it’s need­ed. That’s prox­im­i­ty of time, and it has almost noth­ing to do with location.

What This Means for Your Business

For mid-mar­ket CEOs, the point isn’t that you need 3D print­ing or an AI stack. The strate­gic ques­tion is sim­pler and more urgent: where is the gap between what you deliv­er and when and where your cus­tomers actu­al­ly need it?

That gap, in time or in loca­tion, is both your biggest vul­ner­a­bil­i­ty and your clear­est path to growth. The com­pa­nies win­ning right now aren’t the ones with the best prod­ucts. They’re the ones clos­est to the spe­cif­ic need at the spe­cif­ic moment, for this cus­tomer, right now. That’s hard­er than stan­dard­iz­ing an offer­ing and push­ing it through a chan­nel, but it builds stick­i­er rela­tion­ships, bet­ter mar­gins, and growth that com­pounds instead of churns.

It’s a strat­e­gy ques­tion, not a tech­nol­o­gy ques­tion, and it starts with lis­ten­ing dif­fer­ent­ly. Not ​“what can we build?” but ​“what does this cus­tomer need to be true in the next 90 days, and how close to that moment can we get?” Speed-to-rel­e­vance is replac­ing speed-to-mar­ket, and the com­pa­nies that under­stand that now are build­ing posi­tions that will be very hard to attack from behind.

Chal­lenge

Map the dis­tance between what you deliv­er today and when and where your best cus­tomers actu­al­ly need it. Look at both gaps: time and loca­tion. Then ask what one move could close the big­ger of the two in the next 90 days. That’s your Prox­im­i­ty opportunity.

Watch the Full Inter­view with Kaihan

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About Kai­han Krippendorff

Kai­han is the author of six books, includ­ing the best­sellers Dri­ving Inno­va­tion From With­in and Out­think the Com­pe­ti­tion, and most recent­ly Prox­im­i­ty. He’s the founder of Out­thinker, a glob­al think tank where chief strat­e­gy offi­cers work through their hard­est prob­lems, and he’s been named one of the world’s top 20 man­age­ment thinkers by Thinkers50 and Glob­al Gurus. He left McK­in­sey at 29 to write his first book because he believed there was a bet­ter way to think about strat­e­gy. His frame­works have since helped gen­er­ate over $3 bil­lion in new annu­al recur­ring rev­enue for the com­pa­nies he’s worked with.