Should It Be in Your Front Room?

Peter Drucker, the management professor and speaker, once said, “If it doesn’t belong in your front room, put it in someone else’s front room.” I love this analogy, particularly the idea of the ‘front room’- a term my grandmother used.
This addresses several concepts in business. Stick to what you know, don’t try to be all things to all people, consider where you are an expert and can really add value.
Total Titanium is an 18-person company near St. Louis that manufactures equipment for eye surgeries and ear, nose and throat operations. The family owners describe “a near-death experience” for the business in 2000.
The business “brought in partners who purchased 51 percent of the company to develop a new kind of bone injection gun. During the effort to perfect the device, (they) had little time to devote to (existing customers). The bone gun never took off, and sales (for the original product) were falling.” Eventually, the company bought back their interest in the business and dropped the bone gun idea. They returned to the original business plan.
This story brings up the “double whammy” of taking on a new line of business. First, can you continue to manage the original business? Second, how well have you planned for the new venture? What (and when) is the exit strategy, if the new product does not work?
The Lesson: Consider carefully how you will enter a new line of business- and maintain your current product or services.
Your Homework: Have you been involved in a business that “drained” you time, effort and capital from your primary work? How did you resolve the issue- did you discontinue the new venture? Was there a long-term impact on your business?
(Source: “Heavy Metal”, St. Louis Business Journal, 6/1/07)