Secrets of 7 successful companies that do some things badly

Is being bad part of your strategy? It seems counter-productive, doesn’t it? But it’s not. Successful companies know this secret and practice it so that they can be the best at their priorities.

The concept of focusing on a single business model is not new. In 1995, Treacy and Wiersema wrote “The Discipline of Market Leaders.” They described three core business models and made the case that to excel in business one needed to pick one model and use it to frame all decisions. One needed to have the best product or experts, or one needed to be the most efficient operation, or one needed to wrap their business around the client’s business and deliver it “their way.”

Since 1995, there has been substantial debate on whether one can ignore two of the three models. I was employed with one firm for 15 years that refused to acknowledge that it should focus on one model. Over two decades the company did none of them well and profit and growth was erratic at best. Later, I was involved with setting the direction of the firm and we did choose one. That firm grew by a factor of 3 in two decades. What I tell my clients today, is to pick one and 80% of their focus is on that one, then spend 15% on the second, and less than 5% on the other. The point is to know one cannot be good at all things.

DSCN8820In Michael Maddock’s recent piece in Forbes, “How Being Really Bad Is Really Great For Business,” he is more extreme. I don’t interpret this literally but since there is so much natural resistance and fear with choosing one model, to avoid falling back into trying to be all things, I do think it is often necessary to be extreme. To make the point, Maddock provides inspiring examples of seven well-known brands that achieve greatness using this strategy.

“I advise my clients to pick one model and put 80% of their focus on it. The point is to know one cannot be good at all things.”

Reacting to negative feedback on your low priorities by making changes takes energy away from the important ones and will not help your organization grow stronger. To explore the 3 business model ideas, make a list of common business decisions and then identify the focus of each for each of the models. You will see that actions and decisions that support one model, conflict with the others.  Stick to your guns and stay focused on the prize.

Doug Reed