Letting Go is the Hardest Part

I had a great conversation over coffee the other day with an acquaintance that runs a small business in town. He'd read my posting touting the benefits of focused product lines, and had a major objection. His argument boiled down to this: He needs all the business he can get, and can't afford not to offer a wide range of products and services.

I understood his plight, and I paid for his coffee. But I don't agree with his analysis.

If his objective is to earn enough money to pay his bills this month, I can see his logic. If, however, he is trying to build his business for the long term, he should take a different approach. I recommend the following:

Part One: Find a unique niche that will provide both sales and profits.

This is a three-step process:

• Find a product or service at which his company truly excels, and
• the competition does not do particularly well, and
• that appeals to a significant segment of his market.

I know, that seems like a big, perhaps impossible task. Isn't everything already being done? Aren't the competitors already in the lead in these areas? Not necessarily.

Most competitors are not particularly innovative, and customers are always looking for new products and new ways to do things. There are often unexplored niches available to exploit. And all significant profits come from providing something the competition doesn't have.

Many business people will say they differentiate their business from the competition in some way. Observe them at work, however, and what you see is their daily attempts to convince customers that they are:

• Nice people to work with
• Willing to work hard for their customers 
• Always eager to offer a discount to get some business.

Two problems with this approach: It doesn't set them apart from the competition (who are doing exactly the same things) and it doesn't give customers a compelling reason to buy from them. (Read The Big Question post here.)

So get going, find the one big thing that will set you apart from the competition, and then move on to

Part Two: The really hard part, Letting Go.

The first part is undoubtedly difficult, but it deals with pragmatic, quantifiable issues. Part Two is much harder because it has an emotional impact. Part Two involves Letting Go of something.

• Your staff is already busy doing things they assume are important.
• Your management group bandwidth is already stretched working on existing projects.
• Dedicating time and resources to the new focus (as determined in Part One), requires eliminating some current activities.

It may be some products or services, it may be some territories or some specific customer groups. It won't be easy, and it may feel like you are being asked to cut off one of your arms. However, not all products, territories, and customers offer the same profitability or have the same future potential. They do, however, all soak up resources that would be better applied to the new focus.

Calculating what to eliminate may not be highly difficult, but actually Letting Go can be extremely hard to do. That will be the true test of your leadership skills.

Practical Tip of the Day:

Look for some new ideas that will set you apart from the pack.

• Listen deeply to your customers. What are they looking for that you aren't providing now?
• Listen to them again. What do they dislike about your competition?
• What are the innovators in your industry doing to set themselves apart? Are there any clues here you can adopt?