DIVERSIFICATION—THE BIG GROWTH DRIVER
Updated: Aug 18, 2021
Faith Works! Article by Pastor and CMO Mark Coronna, Copyright 2021
Everyone would agree that roadmaps have tremendous value—whether for businesses or for non-profits. Roadmaps that lay out future growth potential are particularly valuable. As one of my investor friends says: “You can’t manage what you can’t see clearly.”
There are numerous reasons to have a clear view of your growth roadmap, whether in life or in business. Here are a few reasons you need a growth roadmap—and hopefully, a diversified growth roadmap.
• Over time, every business’ core products, services, and markets will start to become less relevant and atrophy as they are replaced with innovative new products or services.
• For each of us as individuals, personal and professional growth is important to us, too. Life-long learners live purposeful, longer lives.
There are many ways to grow your business, including growing your existing or core business. But what if 85% of your business is with one customer or in one market? We recognize these as business risks. The experiences of businesses during the past couple of recessions should make diversification a high priority.
The pandemic has demonstrated these dynamics in a familiar way. For instance, if you only manufactured restaurant equipment, you probably had a poor year in 2020 as restaurants closed. You could also be looking at several future slow years as restaurant traffic will take some time to build and there is a lot of used restaurant equipment for sale. Your target market is not healthy, and growth will not return soon. If you had one or two other markets other than restaurants you provided equipment to, you were likely shifting your focus to those that might either have seen growth or at least are recovering more quickly.
One of the challenges with high customer or market concentration is lethargy. You can be celebrating your market leadership in one market right up to the day when the market dynamics turn unfavorable. You can celebrate a major customer renewal right up until the day they get sold and a new decision-maker comes on the scene. There’s any number of bad things that can happen, many of which a prepared mitigation strategy would alert you to. A change in interest rates, a pandemic, and act of God, a terrorist event, a change in the decision-maker in your long-term customer—these are only a few examples of events which can negatively impact your business in the short- and long-term.
Diversification has Biblical roots, too. Take a look at Acts 2. The disciples were locked in a room when the Holy Spirit descended on them. The disciples probably had no future roadmap for how they might spread the message outside of Jerusalem. The Holy Spirit was an outward sign of God’s presence and desire for ALL people to know him and come to him. That became their roadmap. But now, they needed the right skills.
One of the big benefits the Holy Spirit brought was the gift of language. The disciples were immediately able to speak in the many languages of neighboring people: Parthians, Medes and Elamites; residents of Mesopotamia, Judea and Cappadocia, Pontus and Asia...the list goes on. With this gift, the evangelistic efforts of the disciples were now highly empowered by being able to communicate with many people in their own native tongues. This is also an example of diversification and is a wonderful precedent for how the church grew. Language previously was a limiting force or barrier—now it became a competency and allowed the Christian movement to spread quickly from Egypt and Africa to Rome and everywhere in between. It was a sign from God that now not just Jews were God’s people, but that all non-Jews would be brought in if they believed.
Diversification enables every organization to broaden its base of customers (or members). You can think of it as extending your business or organizational base into new geographies or new markets. That’s not only healthy but helps manage risk.
Future growth needs consistent attention. It also needs a plan or roadmap, and it needs people with the right skill sets. The disciples would have been much less successful spreading the message without being able to communicate in each listeners’ native tongue. The roadmap for spreading the Christian message was prophesied in Daniel when the Lord proclaimed: “All nations and peoples of every language worshiped him.”
Get started planning for the future of your business or organization now. Prepare for the day when the limitations of the marketplace constrain your ability to grow successfully.
“The Holy Spirit comes at Pentecost.”
“He was given authority, glory and sovereign power; all nations and peoples of every language worshiped him. His dominion is an everlasting dominion that will not pass away, and his kingdom is one that will never be destroyed.”