Most people attribute Steve Job’s success to his incredible creative genius, which was certainly a huge factor, but what many don’t realize is how his ability to identify his top three priorities and obsessively laser in on them was what helped him execute his great ideas.
Take the iPhone and iPad for example. The iPhone was originally released in 2007, but Apple had actually begun developing the iPad many years earlier. Some within the company wanted to develop both the iPhone and iPad at the same time, because there was tremendous interest from consumers for both products. Many people in Apple thought they needed to strike while the iron was hot and try to become leaders in both segments of the market simultaneously or a competitor would edge them out.
However, Jobs believed the phone market was more important and that they needed to focus on getting the iPhone right, because many of the features like touch screens would later be incorporated in the iPad. He didn’t think they could develop both products at the same time well, and he felt they would run the risk of ending up with two mediocre products rather than one incredible product. Jobs saw this risk as being greater than the risk of a competitor entering the tablet market before they did. He was convinced if they could nail the iPhone, they would surely come up with a superior tablet product in the iPad. We all know how the story turned out and Jobs was right.
Jack Welch adopted a similar philosophy while running GE. When he became CEO in 1981, only 3 of GE’s 350 business units were number one or two in their marketplace while the rest were underperforming. To focus the company’s efforts, Welch decided that he would only operate in markets that they were number one or two and dispose of the rest. This created incredible focus for the company and lead them to extraordinary profitability during his tenure.
Anyone who follows Warren Buffett knows he is fanatically focused in just about every area. He is often quoted as saying, “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
There was a recent story in Business Insider about Buffett helping his pilot understand his three-step process for prioritizing. He had his pilot list the top 25 things he wanted to accomplish and then circle the top 5 things. He goes on to explain that the 20 things “should be avoided at all cost” and only the top 5 should be focused on until they are complete. Then and only then move down the list.
As the economy improves, there are more opportunities popping up for businesses, and for contractors this can take a variety of forms like opening a maintenance or service division, venturing into a new type of work, adding a new location, creating an equipment company, getting in the real estate business, and the list goes on.
Many of these may be great opportunities, but they can also lead to distraction from those top 5 priorities Buffett talks about. This is especially true when more than one new venture is taken on at one time. I am starting to see contractors that are sacrificing current profitability by taking on too much. My standing guidelines for this are:
1. Always preserve the core (i.e. the Golden Goose). Anything that takes away from that should be scrapped.
2. Only take on one or two new things at a time. I know there are people more talented than I, but I personally can’t concentrate on too many new things at once.
3. Monitor the progress of any new venture very closely and don’t divert attention with anything new until it can be determined it is working.