Orange Fungus and Focus

The other day I came across the most conspicuous thing I’ve ever seen in the East Woods – the bright orange Chicken-of-the-Woods mushroom, [tastes like chicken, they say…]. It is about a foot and a half across and covered in brilliant lobes stretching out in all directions – a bizarre sight amidst the deep greens of mid-summer. With these sections of orange going in apparently every direction, it reminds me of the struggle that many growing companies face as they reach out to every avenue that could yield a few sales. The challenge being – when do these market excursions need to end and a more focused growth phase begin.

It is a natural tendency to go after new business, even if it is not in the desired strategic direction (if one exists…) If fact, this exploration is often a necessary process to determine where the most profitable opportunities lie. However, in order to capture the leverage and efficiencies need for healthy growth, some degree of selection hast to occur, and sooner rather than later.

So how do you know when you need to pick the winners and leave a few segments behind? A few indicators are:

• High cost of sales
• Low or no top line growth
• Harried staff chasing lots of directions
• Different competitor battling you at every sale

This inability to gain some multiplier on your efforts is the key indicator that it is time to focus.

When you are facing this situation you need to act. I am not saying just pick one and hope it works out, but rather pause to take a close look at these segments and develop a rational approach to attack them. For instance, maybe drop the petroleum segment since it provides no synergy with your life science efforts, or put all your efforts into bioprocessing since that is where the bulk of your expertise lies.

Whatever the reasons, there comes a time when going in many directions is the wrong approach. Though the chicken mushroom looks resplendent projecting itself in all dimensions, this fungus is not a good model for profitable growth.