Again With The Power Of Focus

toiletpaper“There is no business that cannot improve its performance by narrowing its focus.” Thus stated David Palmer an original member of our team many years ago. And I keep finding examples to prove he was right. Here is another: New England Paper Tube.

Business Week highlighted them recently in a focus on manufacturing piece in the September 5-11 issue. The company was founded over 100 years ago. They made and make paper tubes. Think toilet paper tubes as an example. They generated about $12MM in revenue in the 1980s. However as the industries they served left the area, their revenue shrank. By the beginning of the “great recession” they made over 500 different products and couldn’t make payroll some weeks. Bankruptcy was imminent. The question was only whether it would be for liquidation or restructuring.

By narrowing the offering to about 140 different products (down from over 500), and selecting products where they could add value and make money, NEPT started turning a profit and succeeded in restructuring. A focus on convolute tube and eliminating most, if not all, spiral tube helped the company turn the corner.

As larger companies like HP restructure to narrow their focus, we are reminded of the wisdom of Dr. Palmer’s statement.

Where is your focus?

Mitch

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This entry was posted in competitive advantage, Focus and tagged , , . Bookmark the permalink.

One Response to Again With The Power Of Focus

  1. Gerald Gooze says:

    I also find this true when a company buys another company & then gets rid of any divisions that are eating up profits.

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