45. Tom Peters searching for small business excellence in tough times No 7
Peters and Waterman’s 6th Precept from In Search of Excellence is “Stick to the Knitting’ – a homely way of saying ‘stick to what you know and are good at’. Many large companies looking for opportunities to expand have been guilty of getting involved in businesses they thought would fit with their business but did not really understand. (Can any of you remember when the banks went buying into the estate agency business before the last downturn, and then proceeded to lose shedloads of money and had to extricate themselves with big losses?). There are many examples.
But in tough times, when things get a bit difficult in their core markets, many small businesses are tempted to branch out into new ventures, which hold the prospect of a better future. But how often is the grass actually greener on the other side of the hill? The chances are you might find yourself trying to solve the problems of two troubled businesses rather than one. And if that effort directed at getting into a new market place were directed at your core business, which would have the biggest impact?
The most important factor is that, whatever direction you decide to go, you are fully aware of what you expect to get from that effort, have a realistic understanding of what is involved and what the costs will be, and what the timescales are. This is about research and understanding rather than hope and need.
So make sure what you choose to do is for the right properly researched and thought out business reasons, and not driven by an emotional reaction. And be cautious of things which take you too far from your areas of expertise and understanding. The big businesses which have a poor record of making a success of new market ventures will have put a lot of effort into doing research, but probably that research will have been driven by the result they wanted rather than a true objective assessment.
So if you make that mistake, you might be in good company, but in tough times you might not be able to survive it!