Diversification is a foundational principle of a sound, long-term plan. One of the key benefits of diversification is that it makes for a smoother ride on the path to achieving one\u2019s goals. In short, we are vulnerable if we rely too heavily on one species, one major customer or one region. Diversification is about developing new products, exploring new markets and taking new risks. None of this diversification lingo is not new information. So why don\u2019t we diversify?<\/p>\n\n\n\n
We Intentionally Say No<\/strong> We Don\u2019t Like Risk<\/strong> We Don\u2019t Have the Right Expertise<\/strong> We Don\u2019t Have the Right Mindset<\/strong> Diversification can mean something different to every single business. It takes effort and its own kind of focus, so it\u2019s important to first assess whether it\u2019s something your company is striving for, and if so, then examining and perhaps also trying different avenues that may suit your business and your company mindset.<\/p>\n\n\n\n
I\u2019m as surprised as anybody, but Crocs\u2019 all-purpose footwear is still going strong long after their 2002 debut. They\u2019ve come a long way since then; their initial batch of 200 pairs sold out immediately, but they now weigh in as a $880 million company, just in the U.S. And still they remain singularly focused on their flagship product. Michelin is another company that notably stuck to its guns – or, in this case, tires. Although they\u2019ve dabbled in manufacturing things like road maps and rocket components, Michelin keeps coming back to the product that made them famous: tires. They were the first radial tire company to span the globe, and today they\u2019re one of the most recognizable names in the automotive industry.<\/p>\n\n\n\n
Keep in mind that the path toward diversification will be decided, at least in part, by how much of a risk we want to take – and how much money we have available to take it. If one is risk averse, they tend to not diversify, which in the end is sometimes very risky.<\/p>\n\n\n\n
When you do one thing, you can train your staff and use their expertise to execute, unlike when you offer dozens or hundreds of products that require additional expertise not currently possessed by your staff.<\/p>\n\n\n\n
Diversification must be a purposeful mindset to influence the future of the company. For many, this mindset is just not an option. Having the openness to hear new ideas, and the flexibility to act on tactical diversification opportunities that can ultimately serve you better than sticking strictly to your original strategy takes an open, visionary mindset. Note that only 3.2% of Americans are visionary so this is difficult.<\/p>\n\n\n\n
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