Irrational Arguments Against Focus

By Tim Williams

Despite decades of books and literature supporting the importance and value of a clear, well-defined focus, most business firms persist in trying to be a little bit of everything to everyone. These organizations not only lack an understanding of strategy (deciding what you are not), but actively resist the idea of focusing on a select number of competencies or markets.

P&G’s A.G. Laffley eloquently describes positioning strategy as deciding “where to play” (market focus) and “how to win” (product focus). Companies like P&G are relentless in continually refining their focus. Just recently, the company announced it is selling or discontinuing half of their 150 brands so they can focus on the ones that generate the majority of their revenues and profits.

It’s counterintuitive to think that the way to expand your profits is to narrow your focus, but informed business strategists understand the direct correlation between “strategic purity” and profitability. In fact, Wall Street analysts actually attach a “diversification discount” to unfocused companies, discounting the stock by as much as 10%, because they know that generally the more diversified the company, the less profitable it is.

So if the power of positioning is an indisputable truth, why do so many agencies and agency professionals not only ignore this fact, but sometimes actively fight against it?

AN IRRATIONAL ARGUMENT

In my consulting work with agencies and other professional services firms, I’ve heard a very long list of objections to a focused business strategy. Curiously, many of these objections are emotional — not rational — and consist of arguments like:

“I don’t want to be pigeonholed as a specialist.”
Alright.  Just remember that in medicine, law, academia, art and almost every other field, the people doing the most interesting, groundbreaking work are always the specialists, not the generalists.

“I don’t want to focus our firm because I like the variety of doing a lot of different things.”
OK.  But you’ll have to accept the fact you’ll likely never be the best in the world at anything.

“I don’t want to focus because our area of specialization might experience an economic downturn.”  
Yes, and your firm could also be hit by a decimating lawsuit tomorrow.  No industry segment is immune from economic ups and downs, and more importantly, no category can say with certainty that it won’t be disrupted by an inventive new player. Using economic unpredictability as an excuse not to focus is just that – an excuse.

“I don’t want to focus because I would be bored by a steady diet of _______.”
Do you think neurosurgeons are bored by constantly studying the human brain?  Are criminal defense attorneys bored by their next murder case?  On the contrary, the most successful people or businesses are motivated by cultivating an ever-deeper understanding and exploration of their area of expertise. It’s much more likely that by insisting on remaining a generalist, you would become bored (and even frustrated) by dealing with the type of unsophisticated marketers that hire jacks-0f-all-trades.

“I don’t want to focus because I don’t want to pass up any opportunities.”
This ranks as the worst of all excuses. Buyers of your services aren’t looking for “everything.” Especially in professional services, the most sophisticated clients are looking for a specific type of expertise, not a “wide range of experience.”

REASONS TO LOVE FOCUS

More revenues.  It’s a simple fact that the specialist earns more than the generalist. This is true in medicine, law, engineering, architecture, consulting, construction—you name it. This is because the specialist knows more, and we live and work in a knowledge economy.

Bigger market area.  Focused firms draw clients from all over the globe, not just from their own zip code. That’s because what they’re selling isn’t available down the block from some other firm just like them.

Fewer competitors.  The easiest way to narrow your competition is to narrow your focus. There are far fewer specialists than generalists, and the law of supply and demand dictates that the less the supply, the greater the demand.

More sophisticated clients.  A quality value proposition attracts a quality client. A business that proclaims, “We’re right for everybody,” logically is going to attract both the good and the bad.

More respect from clients.  Knowledge and expertise equal respect. An effective value proposition allows your firm to develop and leverage its intellectual capital. This makes you valued—and respected—not just for what you do, but for what you know.

The focused firm derives a lot of other benefits as well, because a clear positioning strategy helps establish priorities and creates and marketing platform that attracts not only better clients but better talent.  Now more than ever, the counterintuitive solution to growth is to narrow your focus, not expand it.