You’re often faced with a simple choice: keep growing your core or expand into new arenas. It’s a challenge of balance.
By growing your core, you’re building what you’re already successful at. Customers have validated that product or service. It’s likely very profitable. And as you’ve heard me pontificate on before, strategy is inherently about saying “no.”
On the flip side, your core can only get you so far. The ideas behind it might get stale or run their logical lifespan. Cool new opportunities and ideas spring up all the time. Many of those new opportunities are untested and unproven though therefore they’re riskier.
Your job as a leader is to balance between strengthening and growing what you already do well while simultaneously finding new growth opportunities for your business. It’s challenging because you have resource constraints and can only invest so much time, effort, and money into building the core and expanding beyond it. You have to make this tradeoff effectively. This applies to you whether you’re a small business or a monolithic one.
So how can you strike that balance?
First, define your core.
Too many times you take the core for granted. “It’s just what we do.” When is the last time you took a step back and rigorously evaluated what you’re really selling and what gives you a competitive edge? I thought so (that’s why defining these skills is one of the first things we do as part of strategic planning work with clients).
Define your core competencies and the things that differentiate you from your competitors. Hone those two or three major thoughts. If you’re great at customer service and being a high quality producer (e.g., Nordstrom’s), stop trying to become a low cost value player like Wal-Mart. It won’t work out for you.
A simpler analogy – when Michael Phelps first started swimming, I bet he focused on his freestyle stroke and didn’t worry too much about his jump shot or free throw skills.
Once you’ve focused on those core skills and the opportunities they support, start saying “no.” Say no to any activity that dilutes focus on those critical areas. Instead, set aside those resources for your growth opportunities. Yes, this means your core will fund new opportunities.
Second, find new opportunities consistent with your competencies.
Given the plethora of cool stuff you could go do, it can be a distracting and unnerving exercise to figure out where to grow next. Remember those core skills we identified before? Let them guide you here. Those core skills and your organization’s mission serve as your “primacy of purpose” and should guide new opportunities you pursue.
For example, if you’re a Nordstrom’s, look for new opportunities consistent with high-end skills. Maybe you start offering spa services in your stores. They also require outstanding customer service and you can price at the high end because you offer distinctive experiences.
For opportunities that aren’t consistent with your core competencies and are too much of a stretch for you to be successful with, kill them. Ruthlessly. Say no.
These types of “opportunities” will become black holes of effort and you’ll likely fail at chasing them. Why? You don’t have the skills to go after it. Remember the Michael Phelps point above? He probably went from freestyle to breaststroke to butterfly. He build new offerings based on his core skills. Again, he didn’t pursue learning the javelin or shot put.
Look across the list of things you’ve said you’re going to pursue. Are you doing enough to strengthen, grow, and defend your core? Are you also seeding new products, services, and opportunities? You should be able to glance at that list and have a good gut feel that those opportunities are balanced.
Your job as a leader is to continue honing what makes you great while at the same time not allowing your organization to become irrelevant or miss out on great new growth areas. All of that work starts with a simple assessment of what makes you great in the first place then eliminating work that doesn’t use those skills.
When is the last time you balanced your portfolio of work? How do you manage the challenge of growing the core versus expanding beyond it?