There’s a decision that every commercial leader in a charity has to make. Do you develop more products and services, diversifying the portfolio of what you do, or do you invest heavily behind just one or two, and scale them up as aggressively as you can?
Trying to do both is like a dog chasing two hares – catching one is hard enough; catching both is physically impossible.
Diversification is something of a buzzword in charity circles. The received wisdom being that if you can grow income from lots of different things, you’re running less risk of losing a big chunk of that income if its source drops off a cliff. It sounds sensible, but risk doesn’t work that way.
No serious investor sees Apple as a high-risk stock. It’s the world’s most successful commercial organisation, and it generates most of its income from just three things: digital content through iTunes and the App store; iMacs in desktop and laptop form; and touchscreen mobile devices of various shapes and sizes. Look around an Apple store and you’ll see the least diverse product portfolio of almost any Fortune 500 business, yet Apple now has over one billion products in its customers’ businesses, homes and hands.
Apple didn’t waste time and energy developing a raft of new products and services to open that customer base up. It just made the few it had work together brilliantly, as an integrated, flexible, and incredibly simple suite of outstanding products, and it focused the rest of its efforts on rapidly and aggressively scaling them into diverse markets around the globe.
Scale brings enormous benefits if it’s done in the right way. It dramatically increases the reach and potential impact you can have in the world. It attracts investors, supporters and talent to your organisation, it raises your profile and your influence, and it makes your business more profitable, creating headroom to reinvest. Intuitively we all understand this, but it’s incredibly rare that charities put in the time, money and focus to actually bring it about.
In the race for resources, what with ‘retaining contracts’, ‘competing for business’, ‘delivering and maintaining services’, where does rapid aggressive scaling come in the list of priorities? Often, it isn’t even in there. It’s missing in action. Lost and buried beneath the reactive and the urgent.
The most successful charities I’ve worked with have recognised the opportunity to scale up their best, most distinctive services, and followed through with energy, investment and pace. The less successful, and sadly more numerous, talk about scaling with a hesitant trepidation. They’re more comfortable extending the list of things they can offer; less confident about seriously investing behind the best they already have. They believe it’s a lower risk approach, has less chance of failure. And it’s true: if you don’t try, you can’t fail, but neither can you learn, nor can you really succeed.
The further down an organisation you go, the more this view tends to prevail, which is why it really is a decision that every commercial leader has to consciously make. Choosing not to decide is still a choice; it’s a choice to leave it to the team, and the result, nine times out of ten, is more proliferation, less focus, and less profitable growth from your commercial business as a whole.
If, at the heart of your portfolio, you’ve got more products and services than Apple’s three, you need to take a serious look at what’s working, what you have that’s unique in the marketplace, what could be integrated and simplified to give clients and customers better solutions and greater value. Ask yourself which of them have the potential to rapidly grow if you had the right people and skills to drive it.
That’s where you need to invest your time, energy and money if you want to get serious about scale.