Out of Control
You may think you're on the right track, striving for excellence in all areas. But are you heading for disaster?
Bobby Friedman understands that art collectors looking to frame
million-dollar pictures don't patronize Chestnut Hill Framing
Inc. because he possesses special technology, a unique location or
the lowest prices in town. "The reason they come to my shop is
because of me," says the Chestnut Hill, Massachusetts,
entrepreneur.
Twenty of Friedman's 42 years have been spent designing and
crafting frames for discerning clients who pay as much as $20,000
for them. He knows how to build relationships with customers,
understands what they want, and executes their desires in an
impeccable fashion. That's why Friedman has resisted
temptations to enter higher-volume businesses, such as framing
inexpensive posters, or expand his 11-year-old business beyond its
single location. "I can't duplicate myself," he says.
"And I have a good thing going."
You probably wouldn't call him humble, but Friedman is
smart, says Christopher Zook, head of Worldwide Strategy Practice
for management consulting firm Bain & Co. and co-author of
Profit From the Core (Harvard Business
School Press). In the book, Zook and co-author James Allen argue
that one of the most beneficial things entrepreneurs can do is find
ways to expand that build on their strengths while avoiding those
that don't.
Content Continues Below
Sure, that may sound obvious, but entrepreneurs tend to stray
from their core, frequently in disastrous ways. Even Dell Computer
Corp., regarded as nearly flawless in refining and executing its
direct-sales strategy, suffered when it veered into selling
computers through retail stores in the early 1990s, Zook notes.
Why do entrepreneurs make the error? Hubris is one reason,
explains Zook. Entrepreneurs think because they've done well in
one field, they'll do well in another, without appreciating the
special qualities that helped them or their businesses succeed thus
far. In cash-strapped small companies, Zook adds, an unexpected
opportunity to snare additional revenue in a business far from the
company's core often proves irresistible.
Page 1 |
2 