The Focus Paradox: How It Drives Growth And Creates More Opportunities

“Strategy is about making choices; it’s about deliberately choosing to be different.” — Michael Porter

Differentiation results from making focused choices.

Differentiate or Die; is the name of the game. The research from Hermann Simon about high-growth companies called Hidden Champion have one thing in common, relentless focus. And that helps them create leverage not only in price but also in customer preference over others.

Unfortunately, most entrepreneurs follow conventional paths of “being the same”.

Making Focused Choice Is Hard

Here are a few reasons why entrepreneurs struggle with making focused choices:

• Shortsightedness: They fear they will hamper their current prospects
• Depth: They do not yet understand what creates value in their industry
• Risk-averse: Covential paths ensure certainty of return
• Change: Focused requires making new adjustments

It is exactly these hard choices that create a paradoxical situation. Let me solve this paradox for you, there are 3 major focused choices you need to differentiate and create leverage:

#1 Customer Focus:

Not all customers are good customers.

Identify who are your best customers both in terms of financials and relationships. Chances will boil it down to only 2–3 types of customers. Understand who they really are: How would you define them? What are their growth aspirations and prospects?

Communicate this definition to your sales team and marketing team.

#2 Market Focus:

Next, see which markets have been the best for you in terms of their finances and dynamics.

Chances are your best customers are actually in best-performing markets but it is not necessary. Boil it down to which products/services are making the most impact. This will tell you what you are good at delivering to the market that is valued and also makes a profit.

Now you have a clearer set of dimensions about who and where.

#3 How-To Focus:

Next, it comes down to the act of adding value.

The act of creating value is a set of activities you are indulging in that are creating the end value delivered to the market behind best-performing products/services. You don’t have to do everything to make end value but you have to add value such that you retain your customer choice in the long term. Maybe it is customer service, turnaround time, customization. Make it concrete and do it better.

So this sums up how you more focus bets and in doing so redefine your business such that it is differentiated and creates leverage and impact (profit and purpose)

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