Opportunities that ruin your business
Just before Christmas I spoke to the CEO of a business that manages a portfolio of beauty brands. “We’ve no shortage of ideas”, he told me, “we generate plenty ourselves, and we must get a couple of dozen sent in to us every week. There’s no way we can evaluate them all. What we need is a fast way of filtering through them so we can focus in on the ones we could really do something with.”
The quickest filter is “Strategic Fit”. If an idea doesn’t fit with who you are, what you want to do, and what you excel at, give it, sell it or license it to someone else. It could be the best idea in the world, but it isn’t for you. Strategic fit is how well an idea matches your organisation’s position, passion and expertise. But are you and your team clear on those things yourselves? Here’s some clarity:
Position: The market you’re in and the role you play in that market. There are four generic roles: “the easiest”, “the cheapest”, “best in class” and “the only”. Depending on which role you play, the filter questions are simple: will this idea make something that’s: easier, cheaper, better or unique? And if you don’t fit into any of those roles, you’ve got bigger things to worry about than filtering new ideas.
Passion: It’s not something we talk about much, being British. When was the last time you and your team spoke openly about which things the business does that they get most excited, most enthused, most passionate about? Seriously, you should. It’s important. That’s what should be driving you, motivating and inspiring you. And it’s pretty likely that’s what you’re going to be best at.
Expertise: Most successful businesses are experts in a small number of related skills or processes. Your expertise could be marketing and PR, behavioural change, bespoke design, short run manufacturing. Sometimes it’s hard to spot, but it’s invaluable to know. Opportunities that don’t play to your strengths will be big drains on your organisation.
BOTTOM LINE: Strategic fit is a tool, not a rule, and it’s also highly subjective. Tesco have stretched from traditional retail into retail banking, to retailing utilities and online films, possibly at some cost to their core business. They have broad criteria for what “fits”. The wider you set the filter, the more opportunities you’ll have, but the easier it will be to lose your focus and dilute and your brand.
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