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May 25, 2009

You CAN shrink your way to greatness

GE knew that if it was to be one of the truly great and historic companies, beyond the twentieth century, then it could not throw good money after bad. If it could not be either the first or second in its chosen industry sectors then it wasn't interested in playing the game.

ATARI on the other hand had a different story to tell. After starting the Game mania, they decided to go into making computers as an additional business stream. Ever heard of the ATARI computer?

Ebay is currently trying to work out what to do with Skype after discovering that it really wasn't into the VoIP business after all. (It apparently wasn't in the social media business with StumbleUpon either) Microsoft has failed with great Plains ERP system (Never heard of it right...)

Roberto Goizueta is often credited with making the Coca Cola the brand that it is today during his tenure as CEO. Goizueta didn't expand into other related markets, he didn't distract the attention of the organization on less profitable ventures. Instead, at a time when Pepsi was buying fast food chains and chip producers, he cut everything back to the core business. Selling syrup.

When you try to launch into unrelated or barely unrelated fields you face a number of difficulties. One is competence, as there are almost always competent players in that field already. And the other is bandwidth and attention. Instead of focusing on what is bringing in the cash today, you get sidetracked into often less profitable ventures based on what might work tomorrow.

If you CV is everything to everyone then no-one will ever be able to wade through it. Likewise if your company if everything to everyone then every pitch is too broad and nowhere near deep enough.

You can shrink your way to greatness, in fact - if you want to achieve greatness you need to be able to do everything within a narrow band exceptionally well.