An expert discusses how large companies can decide whether to focus or diversify. While academics have advocated focusing on core competencies and synergies, these concepts often fail. Instead, companies should focus on their purpose, values, decision-making processes, and execution abilities. If a company relies only on domain experts, diversifying may not work, but generalist companies that avoid single points of failure should diversify as much as possible to innovate, exploit opportunities, and utilize resources efficiently. The key is specializing areas of focus while diversifying overall.

1. “Running an Agile Fortune 500 Company”
Aditya Yadav, aditya.yadav@gmail.com
in.linkedin.com/in/adityayadav76
*

2. *
*A Typical Global Company
*Fortune 500/1000
*200 Divisions
*40 Countries
*25000 Employees

3. @ Acme Inc.
*

4. *
*Original Question “How do we decide whether
to focus or diversify? Some firms and divisions
seem to succeed when they focus while some
of the most successful companies are
conglomerates.”
*The Correct Question - “The answer is not
what it seems. Allow me to explain.”

5. And The Philosophy Behind The Answer
*

6. *
*For centuries Academia and Strategy
Consultants harped on the concepts of
*Core Competency, and
*Synergy etc.
*Needless to say they have failed terribly to
explain the basis of the choice between
Focusing and Diversification

7. *
*What are the Top 5 things a company needs to
succeed?
*Purpose
*Values, Principles & Practices
*Decision Making
*Learning, Unlearning and Relearning
*Execution

8. *
*When a company is run by Domain Experts and
Specialists and that’s the only way they know
how to run a business
*They will not succeed if they diversify
*When a company has multiple Single Points of
Failure it can not only not diversify it cannot
also scale very well
*Examples of such SPOF are central divisions,
functions, processes and especially HUMAN’s

9. *
1. Better awareness
2. Attentiveness & Risk Management
3. Originality
4. Novelty perhaps
5. Lots of innovation
6. Agility
7. Resource utilization efficiency
8. Experience
9. Knowledge
10.Exploit Opportunities

10. *
*If you didn’t have the money or resources to
diversify, focus is a no brainer
*If some business required scarce Natural
Resources then that’s a severe barrier to entry,
but other than which there are pretty much no
other barriers today

11. *
*The concepts of Core Competency and Synergy are
next to utter nonsense…
*Perhaps we should create a M&A analysis framework
afresh
* If you solve the problems on slide #8
* Design as per Slide #7
* Are not constrained by Slide #10
* Can develop things mentioned on Slide #9
*You should think Wild! And diversify as much as
possible
*Golden Mantra: Specialists Focus – Generalists
Diversify

12. *
Aditya!!!