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Leadership & Business Wisdom

DIVERSIFICATION

SHOEMAKER, STICK TO YOUR LAST!”

The old cliché is still sound advice. The less diverse a business, the more manageable it is. Simplicity makes for clarity. People can understand their own job and see its relationship to results and to the performance of the whole. Efforts will tend to be concentrated. Expectations can be defined, and results can easily be appraised and measured. The less complex a business is, the fewer things can go wrong. And the more complex a business is, the more difficult it is to figure out what went wrong and to take the right remedial action. Complexity created problems of communications. The more complex a business, the more layers of management, the more forms and procedures, the more meetings, and the moiré delays in making decisions.

There are only two ways in which diversity can be harmonized into unity. A business can be highly diversified and yet have fundamental unity if its business and technologies, its products and product lines, and its activities are embraced within the unity of a common market. And a business can be highly diversified and have fundamental unity if its businesses, its markets, its product and product lines, and its activities are held together in a common technology.

ACTION POINT: Examine your business. Is it focused or diffused? If diffused, develop a plan to bring unity out of the diversity using market or technology as the basis for unity.

BEING THE WRONG SIZE

A BUSINESS THAT IS THE WRONG SIZE IS A BUSINESS THAT DOES NOT HAVE THE NICHE TO SURVIVE AND PROSPER.

Being the wrong size is a chronic, debilitating, wasting – and a very common – disease. Being the wrong size is curable in the majority of cases. But the cure is neither easy nor pleasant. The symptoms are clear and are always the same. In a business that is the wrong size, there is always one area, activity, function, or effort – or at most a very few – that is out of all proportion and hypertrophied. This area has to be so big, requires so much effort, and imposes so much cost on the business as to make economic performance and results impossible. The old American Motors furnishes the example. American Motors announced successive plans to aggressively recruit new and strong dealers and push up its sales. In order to obtain the sales volume that would have given the business a viable size, the expenses that made the business non viable had to be increased. And this is precisely what the business nonviable had to be increased. And this is precisely what the business could not afford.

The most rewarding strategy to come to grips with the problem is to attempt to change the character of the business. A business that is the wrong size is a business that does not have the right niche to survive and prosper. A comparison between American Motors and Volkswagen shows the difference between being the wrong size as a result of lack of distinction, and being the right size by occupying a distinct niche.

ACTION POINT: Analyze your business. Are you to small to compete in the business? If so, develop a profitable niche within which you can compete effectively.

“The trouble with most forms of transport, he thought, is basically one of them not being worth all the bother. On Earth — when there had been an Earth, before it was demolished to make way for a new hyperspace bypass — the problem had been with cars. The disadvantages involved in pulling lots of black sticky slime from out of the ground where it had been safely hidden out of harm’s way, turning it into tar to cover the land with, smoke to fill the air with and pouring the rest into the sea, all seemed to outweigh the advantages of being able to get more quickly from one place to another — particularly when the place you arrived at had probably become, as a result of this, very similar to the place you had left, i.e. covered with tar, full of smoke and short of fish.”

DOUGLAS ADAMS

“An advanced city is not a place where the poor move about in cars, rather it’s where even the rich use public transportation”

ENRIQUE PENALOSA

“A plan is the transport medium which conveys a person from the station of dreams to the destination of success. Goals are the transport fees.”

ISRAELMORE AYIVOR

“A society sufficiently sophisticated to produce the internal combustion engine has not had the sophistication to develop cheap and efficient public transport?’

‘Yes, boss… it’s true. There’s hardly any buses, the trains are hopelessly underfunded, and hence the entire population is stuck in traffic”

BEN ELTON

“[…] there is one inexorable law of technology, and it is this: when revolutionary inventions become widely accessible, they cease to be accessible. Technology is inherently democratic, because it promises the same services to all; but it works only if the rich are alone using it. When the poor also adopt technology, it stops working. A train used to take two hours to go from A to B; then the motor car arrived, which could cover the same distance in one hour. For this reason cars were very expensive. But as soon as the masses could afford to buy them, the roads became jammed, and the trains started to move faster. Consider how absurd it is for the authorities constantly to urge people to use public transport, in the age of the automobile; but with public transport, by consenting not to belong to the elite, you get where you’re going before members of the elite do.”

UMBERTO ECO

“The Beautiful Path is not a place outside of yourself, but rather a place you carry within you everywhere you go.”

BRYANT MCGILL

“God gave us imaginations because that’s one of the ways we can visit the future! Thoughts are transport media!”

ISRAELMORE AYIVOR

“Naturally, everyone is expected to enter the future only once, but by the transport medium of dreams, great people enjoy the future twice! They pay a visit into the future by dreaming, and they relocate to settle in it by their purposeful actions!”

ISRAELMORE AYIVOR

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