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Published on April 25, 2008

eric rosenkranz

er@ethree-asia.com

They really do not know what they stand for, because they are trying to do too many things.

In the 1950's the conglomerate was in. Companies like ITT owned 500 different operations in different industries. They said their core business was managing other companies. Obviously, that did not work.

Companies today are trying to downsize. Philip Morris, a tobacco company that owned Kraft Foods, just spun it off. PepsiCo spun off its fast-food restaurant division (Pizza Hut, KFC). Motorola will shortly spin off its mobile-phone division.

These companies are all returning to their roots. They are focusing on what they know how to do best. Is your company doing that? 

This is where a company strategy comes in. Not a Vision statement: They are too general to provide real direction. And not next year's operating plan - that only tells you which numbers you have to meet.

I am talking about a real strategy, one that outlines exactly where the company is going in the next five years.

What products will you sell, what customers will you sell to, which customer needs will you satisfy?

To focus is hard. It does not mean only saying "Yes" to the things you have to focus on. Steve Jobs said it also means  saying 'No' to the 100 other good ideas that there are".

Recently, there was a report on the top Ivy League schools in America. They accept on average only 7 to 8 per cent of the students who apply. That does not mean the other 93 per cent are bad, it simply means that these schools have to focus on a core selection.

It is the same for your company when deciding which products or services to sell. You need to say "No" to the very many good ideas that are out there, and say "Yes" to very few.

How do you decide? That is where your strategy comes in. Your strategy should define exactly what your core competencies are and who you want your customers to be. It will then give you the criteria for deciding which projects to take up.

When I was vice chairman of a small Chinese company I learnt a lot from Jason Jiang, the founder and chairman. Jason always said, "Focus on one thing." Let us do one thing very well and then we can do something else. We put television screens in the lift lobbies of office buildings and sold advertising space. Everyone thought we were crazy. We listed on NASDAQ less than two years ago, and the company soon had a market cap of US$7 billion (Bt220.6 billion).

Focus. That is what creates

success.