Before You Leap: Is Your Business Ready to Diversify?
In our first post about diversification, we talked about understanding the critical elements of diversification, the drivers behind it and why conducting a strategy audit is essential. After understanding this initial overview of the process, the first step is understanding if you’re even ready to begin the process of diversifying.
Before entering new markets and segments, it’s crucial to understand where your business stands today. A diversification strategy is only as strong as the company executing it. Auditing your current strategy is critical to evaluating your readiness and identifying areas for improvement.
Market, Operations, People: The Holy Trinity of Diversification Success
At FMI we recommend focusing on three core areas during the audit process to understand diversification readiness.
- Market Strategy
A clear market strategy defines where to compete and how to win. This includes:- Who: Target clients and customer types
- Where: Geographic focus areas
- What: Specific project types or market segments
Without this clarity, business development efforts can become fragmented and unproductive.
- Operations Strategy
Your internal operations must be scalable and efficient to support growth. Consider:- Do you have the systems and processes to manage additional complexity?
- Are your financial controls robust enough to handle new risks?
- Can your supply chain and resources adapt to diversification?
- People Strategy
No diversification strategy succeeds without the right people. Evaluate:- Leadership alignment, structure and bandwidth
- Skillsets needed for new markets or services
- Recruitment and retention strategies to build and sustain talent pipelines
By focusing your efforts on these initial areas, you can begin to craft a strategy that focuses on your strengths and identifies areas that need work to achieve your targeted growth. Conducting an audit can save effort, time and money by clarifying your goals and what needs to happen to achieve them.
Get in touch with one of us if you would like to talk more about how we can help your construction business.
