Those that have attended my competitive strategy workshops have heard me say that the key to a great strategy is choosing what not to do: what products/services do I choose not to offer; what activities will I not undertake; and what customers will I not attempt to attract.
But we all know that its hard to say “no” to a new opportunity.
Especially the small, almost unnoticeable, “yeses” that take us away from our strategy. A customer brings you a new idea, (who can turn down a customer, right?); a valued employee has an idea for a new product; you adopt a competitor’s offering with limited consideration to whether it fits your strategy.
And little by little, your company drifts just a little, goes “off” strategy and becomes more complex without a corresponding increase in profits.
Collectively, these small idea are like barnacles: they add up and start to make your once sleek “boat” slow down, and maybe even begin to list a bit. You might be making more revenue, but your profit margins begin to shrink.
As entrepreneurs and business owners, seizing an opportunity when you saw it was how you or the founders of your company got started. But the larger your business becomes, the more important it is to heed the advice of the late Steve Jobs: “People think focus means saying yes to the thing you’ve got to focus on. It really means saying no to the hundred other good ideas that there are. You have to pick carefully.”
Picking carefully or choosing what not to do is a core attribute of very high performing businesses. High performers know exactly what they do better than anyone else and they focus on getting even better at it.
When they look for growth, they start with their distinctive capabilities and then go looking for other markets or applications that might value those capabilities. They don’t stray into unfamiliar areas. Brand extensions are a rare event. They always grow from a position of strength.
But what about innovation? Thinking big? Being creative?
All of these are important requirements for a thriving business but high performers always innovate through the filter of their strategy. But if your strategy is not clear enough to show your employees, your customers or your market where you are going, you just might end up somewhere else.
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This post originally appeared on TurningPoint Strategy and was written by Tony Collins, Aileron Business Advisor and owner of TurningPoint Strategy.