It never ceases to amaze me how many companies chasing top line growth (perhaps to appease Wall Street) diversify into mediocrity … or worse. The latest example is Crocs. Full disclosure, I have worn Crocs for years, much to the dismay of my kids. I even have a pair of Raiders Crocs, which need to be replaced but apparently Crocs has not made a new deal with the NFL so I have to wait until they do, if ever. Meanwhile, they were off expanding into “… product categories including golf and fashion leather boots …” Seriously? Who thought that was a good, or even a viable idea? Have they been fired yet? Apparently yes since a new CEO was installed in January. And his decision can best be summed up by the headline of this article: “Crocs seeks to refashion itself by going back to what it’s known for.” Who let’s this dumb stuff keep happening? Boards that don’t know any better? Companies that need an aggressive top line to appease Wall Street? Maybe the game from the CEO’s perspective is:
- The company’s current strategy won’t achieve high growth goals, so our stock will languish
- There is no clear strategy to achieve growth within anything that remotely resembles our core market
- I am going to get fired if I don’t come up with something
- Buy or expand into adjacent markets I can pretend are synergistic
- If I get lucky and it works, I keep my job and look great. If not the results are the same: I get fired, get a parachute and look for the next company I can fool into hiring me.
Focus works, it just may not be sexy. Mitch P.S. For more on focus, check out the category on the right. I have written several posts on focus.