As we have preached for many years, one area where companies do themselves in is lack of focus. In an effort to “spread their risk” or not “put all their eggs in one basket,” too many companies diversify into mediocrity. As my friend Ted Steinberg likes to say, “They confuse showing up for business with going out for business.” To which I would add that if you want to make money in any market, you have to stand out in the crowd, and you are unlikely to be able to do that in as many places as you think you can.
I was reminded of this again today reading an article in USA Today. They were profiling a 50 year old BBQ restaurant in Tuscaloosa, Alabama. The Dreamland BBQ has the same menu today as it did 50 years ago (ok the prices are higher): ribs, sauce, bread, potato chips, Pepsi, iced tea and beer, and eight locations. Reminds me of the single minded focus on California-based In-n-Out Burger, a fast food money machine for over 50 years.
Between the NY Times proclaiming that the sky is falling for almost a year and the idiots on Wall Street playing games with the credit market, we are clearly in a down-cycle. Focus, as counter-intuitive as that may seem, is the light at the end of the tunnel.
(As a reminder, you can listen to my brief interview on this subject on BBC Radio Ulster).