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In his last book, Profit from the core: growth Strategy in an Era of Turbulence (HBS Press), management consultant Chris Zook advised entrepreneurs to squeeze every atom of growth from their core businesses before diversifying into new markets. Now, in Beyond the Core: Expand Your Market Without Abandoning Your Roots (HBS Press, $29.95), Zook shows what to do when your core simply isn't growing fast enough to keep you afloat.
The basic play here is the "adjacency move"-going into areas away from but still related to your core business, such as new product lines or distribution channels. As described by Zook, adjacency moves are less risky than outright diversification. And because they leverage your existing competitive strengths, profits are likely to be higher as well.
The single best strategy employs "relentless repeatability," which calls for determining what your company does best and then applying that strength in a closely related field. For example, Zook cites Dell's employment of the direct-sales model, which it proved successful in computers, to market handheld computers, networking gear and printers. But take care: His studies show that expansion efforts are common causes of company failure, and that three out of four misfire.
An Offer You
Tony Soprano is no Mother Teresa and no Jack Welch, either. But TV's fictional mob boss does offer lessons for even well-intentioned empire-builders. So argues Deborrah Himsel, an Avon Products Inc. vice president, in Leadership Sopranos Style: How to Become a More Effective Boss (Dearborn Trade Publishing, $20). Himsel acknowledges Tony's failings-a tendency to "whack" opponents, for example-while lauding his empathy, toughness and candor. Specifically, she points to a time he encouraged subordinates to openly discuss a sensitive topic, promising that even blunt comments would draw no repercussions. Try that with your employees, she suggests, and you'll inspire loyalty without having to whack anybody.
by Chris Zook
by Debborah Himsel
Mark Henricks is Entrepreneur's "Smart Moves" columnist.