This time, I would like to introduce important points regarding the diversification of small to middle size enterprises.
The points, which Mr. Inamori reiterated, are as follows.
1 Thinking about management’s energy allocation
2 Increasing your energy efficiency
3 Developing internal resources as division heads
4 Transferring your energy& mindset to those team leaders
5 To assess the performance, looking at figures as final output of the energy transfer
Case
The main business of the company A is the housing construction. At the time of the second generation, the recycling department and the kitchen design and sales department were spined off as subsidized companies under A company group.
Bob, the son of the second generation, became the third generation leader and was handed over the business, but the sales decreased significantly.
Mr. Inamori shared the tips of diversification. In the following, Mr. Inamori’s words are quoted as “”.
1 Thinking about management’s energy allocation
“The point is in a nutshell, the energy. As did each of your father and mother, we, small business owners, tend to think about diversifying our business and expanding our company. However, when a manager is devoting himself to one business, he can concentrate his energy in only one area. But when his energy is dispersed into three, he loses an explosive concentration of his energy.”
2 Increasing your energy efficiency
“While other companies in the same industry are concentrating on one business, your company, especially the energy of top management, is divided into three. It is obvious that you are in a weak position in terms of competition. Therefore, if you want to diversify your businesses and to look after all the business units by yourself, you must use three times as much energy as you do and work three times as hard as you did before. Otherwise, you could not survive under the harsh competition. No matter what scheme you take, you have to commit yourself to delivering far more than you did before. In other words, your determination is needed to proceed with the diversification. Upon such determination, you would be able to think about how efficient your energy can be allocated into the running businesses.”
the point 3-5 will be explained in my next blog.
Further queries or doubts, please email to ytomizuka@abrilsjp.com
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