Emerging companies often make the error of trying to be good at too many things. Business is so competitive today that being good is simply not good enough.
We live in a winner-take-all marketplace, and nearly every field is dominated by a very small number of companies that have achieved their leadership status with a keen understanding and laser-beam focus upon their core competencies.
Gemvara, for instance, is an online jewelry site. But to the founders this description alone would be a jarring understatement of what they have accomplished.
Taking a deeper look, Gemvara’s focus is actually on the deep consumer customization of gemstones. Holding no inventory, the company has built a proprietary order management system that allows for real time assembly orders to be sent to one of several manufacturers once a customer buys.
So while online jewelry is a crowded market with limited differentiation, Gemvara.com has managed to passionately focus on building a highly differentiated customer experience. When starting the business it must have been difficult for the founding team to narrow its offerings to only customized fine jewelry at a time when competitors at every corner were trying to be good at everything. Gemvara instead focused on being great at something and the business is reaping the rewards of that focused reasoning.
With a lack of focus, too many entrepreneurs talk about hitting the target, then they shoot first and call whatever they hit the target. It is very difficult, if not impossible, for a young corporation to develop multiple lines of business simultaneously and have any turn out great. By failing to identify and articulate their core competencies they end up being great at nothing.
Far wiser is determining what you can be great at and focusing relentlessly on that. I am not suggesting that any company, especially a large one, needs to limit itself to a single area of expertise. However, every company, regardless of its size, must have an in-depth expertise in at least one area in order to be viable and achieve leadership status.
Greatness results from understanding how markets evolve. Put another way, you must define the business you are in with the utmost clarity. A company that is unswervingly focused knows what it does best, where it excels, and is not lured from its course every time a new product hits the market. Moreover, it is preoccupied with what it is doing, rather than what it might be doing.
Apple Stores are another good example of understanding focus. Walter Isaacson’s book “Steve Jobs” tells a good story about Steve Jobs and Ron Johnson (Ron was the Senior Vice President of Retail Operations at Apple prior to becoming CEO at J.C. Penney) sitting in a conference room and realizing that the Apple product line was not broad enough to fill the shelves of a conventional store.
But they realized that was their advantage. The store they would build, Isaacson explained, would benefit from having few products. “It would be minimalist and airy and offer a lot of places for people to try out things.”
It might have been tempting for others in their position to fill the shelves with product from a host of suppliers and look like most every other computer retailer of its time. Had they done that the outcome would likely have had the same disastrous finish that companies such as Circuit City saw.
But that is not what they did. They concentrated on the end to end ecosystem of Apple and built what is one of the most entertaining and successful retail experiences of our time.
Risk is Ingrained in the Fabric of Any Successful Culture
Great leaders recognize that risk is ingrained in the fabric of any successful culture. Innovation rarely occurs without risk, which means accepting setbacks. The ability to take risks is a building block of innovation and leadership, and those who shy away from them are rarely successful.
With risks comes mistakes, which every great company has experienced; they are part of the process of building a business. Exceptional business leaders make great decisions; the ability to make those great decisions has come from the experience of having made the wrong ones.
True leaders are often models for greatness, and an examination of their practices provides valuable insights. Being great at what you’re good at isn’t simple. Determine exactly what it is you’re good at and then push relentlessly for excellence.