Some companies lose themselves in trying to grow too quickly. In the fight to get ahead, they forget where they came from – the core tenets that made them unique, and gave them the ability to compete and win.
This can be particularly true for start-up executives, who often find challenges in discovering their company’s true advantage. As they attempt to grow, they sometimes have a tendency to want to branch out beyond that advantage. In many cases, this approach to growth lacks discipline and does not take into account what actually makes their company special – its offerings, yes, but also its core philosophies. If this is the case, the growth process can lead down uncertain paths that include the creation of disparate product offerings, unhappy employees, and disenchanted customers and a lack of competitive advantage.
The business landscape is littered with large and small companies that started doing one thing and then got distracted by bright, shiny objects – the concept of “Hey, wait a minute – if we can do THIS, then certainly we can do THAT, too!” Startups will often try to reach beyond core capabilities, but, unfortunately, in far too many cases this means diluting the focus that initially made the business great, to the point where mediocrity reigns across the board.
Then, there are organizations like Atlassian, a Sydney-based software company. Its website describes the corporate culture and make-up as “geeks, beer drinkers, nerf herders, fraggers and Wolverine-wannabes.” And that could very well be. But Atlassian is also very, very good at creating issue tracking and collaboration software. That’s the company’s focus, and it’s committed to doing it well. It’s why Atlassian has grown from a handful of employees in 2002 to more than 400 today.
There are, of course, examples of larger companies that have done well by applying a laser-like focus and disciplined approach. Over the past five years, Apple has been extremely focused on delivering quality content through the iPad, iPhone and more. Its M.O. is to deliver attractive, cool devices that are fast and user-friendly. While its primary rival Google is intent on offering many services and products in a multitude of areas, getting further away from its core service offering (search), Apple seems content to provide a singular, focused experience. Needless to say, the approach has worked well for the company.
Contrast that with companies like Research in Motion (RIM) or, going back even further, Digital Equipment Corporation (DEC). RIM’s troubles within the mobile space have been well documented, but they stem from one common mistake made by many companies: not listening to the customer base. At one point in time, RIM was an innovator; it provided businesspeople with communications devices the likes of which had never been seen before. But when customers declared they wanted a better browsing experience and applications, RIM balked and stubbornly refused to provide either. The company moved away from a core aspect of its business – providing innovative mobile devices – and have since stagnated.
DEC’s an even more cogent example of a company that had everything yet lost its way. DEC started off by focusing on the microcomputer market, eventually growing into one of the biggest technology organizations on the planet. But the company strayed from its roots, incorporating new and varied products, different distribution models, and more, to the point where DEC became a behemoth without focus, one that could not support its own weight. Slowly, the company that once proudly announced that it had never undergone a layoff began breaking apart until, in 1998, the remaining assets were sold to Compaq – a sad end to a once-promising company’s epic decline.
But for every DEC, there is a Red Hat. For every RIM, there is a SalesForce.com. And for every startup’s inspiration, there is an Atlassian and others like it. All of these organizations have successfully found the sweet spot between growth, discipline, and differentiation by not only identifying and honoring uniqueness, but by also keeping customers happy.
The good news is that discipline is an attitude that can be fine-tuned and adopted.
Kevin B. Thompson
Kevin B. Thompson is president and CEO of SolarWinds (NYSE: SWI), a provider of IT management software. He has served in that role since March 2010. Prior to that, Mr. Thompson was the company’s COO, as well as CFO and treasurer. He has also held positions at SAS Institute and Red Hat,, and serves on the board of directors of NetSuite.
