Tuesday, May 29, 2018

is the business bro ambitious or unfocused?

What's the difference between an ambitious company and an unfocused one? It sounds like a silly joke (or just a silly question) but I think the answer leads to a key insight about how companies make decisions.

A lot of organizations seem to get into trouble when they disguise, excuse, or reframe a lack of focus as ambition. A company with multiple product lines or offerings in many industries could describe themselves as 'ambitious' - after all, look at all the work going on!

But it is just as likely that the company is unfocused. If they have no plan for how to dominate their industry or no consistency in how they allocate resources for investment purposes, then short-term profit-seeking might become the dominant factor in decision making. Why invest in the future if the future is undefined?

A few days later, I was doing some 'business bro' reading (specifically, about Amazon buying Whole Foods) when I came across this little snippet of insight:
If you don’t understand a company’s goals, how can you know what the strategies and tactics will be? Unfortunately, many companies, particularly the most ambitious, aren’t as explicit as you might like.
This was written in the context of Amazon, one of the world's largest companies yet one that Wikipedia helpfully classifies as being in the 'Internet' industry. Internet industry???

Is Amazon the exception that proves the rule? Who knows. With the drones and the two-day shipping and that guy that shoots you in your own house, Amazon does seem like an ambitious sort of place to me. But I would also understand the point of view that Amazon has so much going on it could easily fall into the 'unfocused pretending to be ambitious' category I invented just moments ago.

If I had to pick one or the other here, I would lean toward focused. From my very limited understanding of Amazon's company history, they never sought short-term gains 'just because'. This seems consistent with a focused approach. However, given their massive reach into so many different areas - and now into grocery shopping! - the evidence of being unfocused is there for anyone willing to play Devil's advocate.

Perhaps the Amazon case shows it is OK to appear unfocused so long as the temptation to seek short-term profits is ignored. Just having the resources available to buy Whole Foods shows that they are reaping the rewards of their ongoing focus on investment over the last two decades. If at some point the true focus of the company does emerge, aligning resources and focusing attention on this new purpose will not be distracted by a loyalty to past successes or a need to maintain existing profit streams. Maybe a better way to think of what Amazon is doing involves a combination of the two characteristics - as long as the temptation to settle for short-term gains can be ignored, it is OK to remain ambitious and unfocused.