To Prosper, Stop Adding and Start Subtracting
LinkedIn Article by Tim Williams
February 17, 2015
If you were looking for a person to spend the rest of your life with, is it more likely you’d find him or her at a bar (where you’re likely to find a little bit of everything) or on one of the new matchmaking sites designed to pair interests and personalities? The bar hopping approach might yield the desired result – eventually – but using eHarmony or OK Cupid will get you there a lot faster, and arguably with a much better match.
In the business world – and particularly the realm of professional services – prospecting is subject to the same dynamics. If you put up a website that says “We’ll go out with anybody,” guess what type of prospect you’ll attract. On the other hand, a business focus that clearly communications “We’re not for everyone” produces a much higher quality prospect.
Consultant Greg Paull of R3, who helps marketers find agencies, tells the story of compiling his firm’s directory of agencies. As soon as the directory went live, he was flooded with emails from agencies protesting how they had been categorized. One such communiqué was from one of the region’s top public relations agencies who insisted that they weren’t a PR firm, but rather a “360 integrated marketing communications agency,” asking if Greg could modify their listing.
The firms that understand business strategy know that prospective clients are not looking for a firm that can do everything, but rather a firm that can do something. When’s the last time you walked into a store and said, “I’ll take everything, please.”
You work out to shed your excess baggage. To become “fit” means to pare down and shape up. So it is in business. Your goal is to keep improving your core competencies and peel off those products and services that mostly just weigh the company down with excess overhead.
As authors Gary Hamel and C.K. Prahalad have explained, there’s a big difference between a “capability” and a “competency.” A capability could be defined as a service you are able to perform to the same standard as most other firms. But a core competency is different. Hamel and Prahalad define it as a specialized set of knowledge and skills in that enable you to deliver a value-producing service at a world-class level.
The best-fitting clients are the ones who hire you for your core competencies, not your capabilities. As Rotman’s Roger Martin argues, “Capabilities themselves don’t compel a customer to buy. Only those that produce a superior value equation for a particular set of customers can do that.”
The math of business strategy
Additive is easy. It’s also intellectually lazy. You just keep copying the moves of your competitors until you have a business strategy that’s as bloated as the person who doesn’t know when to stop eating. Or, to take it from the physical to the spiritual, it’s the equivalent of the “unexamined life.”
“Restriction is more powerful than proliferation” says strategist Gareth Kay of Chapter SF. Subtraction, he says, is what makes great design; knowing what to leave out. Indeed, the worst designs in everything from cars to consumer electronics are the ones that try to include everything. It is in large part the simplicity of Apple in electronics or BMW in cars that make them immensely appealing and profitable companies. This commitment to simplicity was summed up beautifully when Steve Jobs said “I’m more proud of what we don’t do than what we’ve done.”
Get your leadership team together for a working lunch and discuss these two questions:
1. If we weren’t already in these sectors, would we choose to be in them now?
2. If we didn’t already offer this current line-up of services, are these the services we would choose to develop now?
For most firms, this type of discussion is like putting your company on the scales and discovering that you have unknowingly gained weight.
There is tremendous economic value in standing for something instead of trying to stand for everything. To end where we began, with the dating analogy, we need to be able to describe ourselves in a way that will make it easy for our best prospective partners to find us. As digital marketing expert Mark O’Brien puts it, “Be the answer prospects seek when they ask Google a question.”