Tag Archives: Split

How Do You Maintain Focus on Your Core While Growing? Six Considerations

Situation: A company has established a strong core business and it is time to diversity. The most promising opportunity for growth is complimentary to but a different business model from the company’s core. What are best practices for maintaining focus on the core business while developing a new opportunity? How do you maintain focus on your core while growing?

Advice:

  • Most importantly, be emotionally and strategically ready to make the bet and commit to action. In doing so you must “know thyself.” Specifically, take a long look to determine whether you tend to overanalyze or are too quick to pull the trigger. Understanding your tendencies will help in the steps below. 
  • Establish the prerequisites for pulling the trigger. This means determining:  the level of operating stability for the core business that will allow you to split focus; the level of financial stability and predictability that will support both core and expansion efforts; and the level of organizational and process stability that will allow you to take on the new opportunity.
  • Understand and define the differences between the old game and the new game. What are the financials of the growth opportunity? How do they differ from your core business? Are there conflicts that must be resolved? Can you launch an innovative solution to differentiate the new offering?
  • Gather enough understanding of market need that will satisfy you with the new opportunity so as to be able to address it effectively.
  • Establish a sound execution strategy and timeframe for launching the new business. Some of your decisions will be wrong. You need the resources to tolerate a learning curve while running fast towards your goal.
  • Draft a leadership development plan for both the core and new business before you start. This plan must define the skill sets and growth needs of each business.

Thanks to Clark Avery for his contribution to this article.

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Where Should You Focus for the Next Year? Three Points

Situation: A CEO has had to shift half of the company’s employees to part-time due to reduced business. This has hampered new product development. The situation has been exacerbated by slow payments from customers. Where should you focus for the next year?

Advice from the CEOs:

  • The company has a lot going on. Validate the company’s market potential for products in development, and start gearing up the marketing program so that it will impact this and next year’s sales.
    • Get a feel for how many customers want the new products in development. Invest in some market research to validate this.
    • The bottom line is that product development only pays if the company can sell a lot more product! The team needs to know whether customers for the new products exist, in what numbers, where and who they are, and their most critical needs. Without this market intelligence, the company is in no position to tell whether there is a market, nor is the company prepared to address it.
    • Assume that there is a market, that it can be quantified. Once the company knows who and where the customers are and knows their most critical needs, the next step is to prepare to attack this market. This is not something that is done in 1-2 months, after the product is ready to sell. The company needs to be starting now if marketing is to be initiated in 6-8 months.
  • Past practice has been to split R&D costs with the customer. The company has the expertise, the customer the money – this is close enough to 50/50. There is no need to show them the numbers. R&D should not be funded through future sales but should be making money now.
  • One project has been taking so much attention that it is hobbling the company. The company is so focused on getting this “just right” for the customer that sales and market development have been neglected.
    • For the next 3 months, focus on completing this project, getting it out the door, and getting the company’s focus back on growth. A sense of urgency is needed!

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