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4 Rules for Diversifying Your Business

March 21, 2024
in Business
4 Rules for Diversifying Your Business
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Venturing into new lines of business can be an effective path to growth.

March 21, 2024

Catherine Delahaye/Getty Images

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Although conventional wisdom suggests that companies should look for growth opportunities close to their core businesses and capabilities, the author points out that diversification can be an effective growth strategy, as long as you follow four rules: 1) focus on the business unit; 2) let the business units drive their own strategies; 3) appoint business units leaders who will act like a CEO and take initiative; and 4) foster a culture in which it is safe to take chances.

One of the most obvious ways to grow a business is to diversify. But somehow, CEOs and their boards shy away from this. Why? The experts have drilled into them that diversification is a very tricky business. It’s a gamble at best, and at worst, it can pull your company apart. “Stick to your knitting!” the saying goes.

Graham Kenny is CEO of Strategic Factors and author of the book Strategy Discovery.  He is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He has been a professor of management in universities in the U.S., and Canada.  You can connect to or follow him on LinkedIn.

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Copyright for syndicated content belongs to the linked Source : Harvard Business – https://hbr.org/2024/03/4-rules-for-diversifying-your-business

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