Businesses need to focus. Trying to be "all things to all men (or women)" doesn't work in a competitive market. Here are four reasons why:
- Customers: Customers buy from a business they trust, a business that offers something better (or cheaper) than they can buy from someone else or indeed do themselves. That trust is much easier to demonstrate, and much easier for the customer to remember, for a narrow range of products or services. Customers like to feel they're buying from the specialist in their field, someone who is the best at what they do
- Competition: It's generally easy to copy business ideas. Competitors can see what you do, customers can tell them about you, employees leave and take your secrets with them. You can only beat your competitors by focusing relentlessly on a relatively narrow set of processes, products, services, locations and so on. If you try and cover too broad a waterfront, you'll be picked off by people who focus more clearly than you.
- Scale The more scale you can gain, the lower your costs will be. Businesses need to build and defend scale and they do this by identifying and exploiting their Sources of Competitive Advantage (also known as Key Success Factors). To misquote Douglas Adams, scale is big – really big.
- People: Employees are at the heart of every business. It's much easier for them to concentrate their efforts on a defined set of objectives, processes, customers, products and so on, rather than a loose agglomeration of stuff. Most businesses can achieve one big thing in a year. Focus on a few things and make them successful – much better than trying to do too many and failing.