One of the most potent tools we use at Capstone to help our clients prepare for an acquisition is a set of seven strategic questions. They are so simple, so obvious, that you’d think them unnecessary to ask. Yet they are often skipped over in the rush to grow. Let me share with you the first of them.
“What business are you in?”
Of course, this is a trick question. The right answer is usually not the first answer. A classic example from the annals of corporate America: Union Pacific thought they were in the business of railroads — the commonsense answer. In reality, they were in the business of mass transportation. Had they recognized this early enough, they might today be flying planes or building hybrid cars.
So exactly what business are you in? Amongst all the host of activities your company is engaged in, where is the beating heart? Step back, look at the big picture, and ask yourself: what is our business really about?
Don’t underestimate how powerful this inquiry can be. Your decision will certainly impact the trajectory of growth you choose. In a world of incessant change, you face an almost intolerable choice of opportunities. Without being anchored in a strong, unhesitant self-definition, you can be easily dragged this way and that. I see it happen, and I see the costs.
“What business are you in?” is a question to live with, to ponder and test and challenge. It can yield extraordinary clarity for your strategic planning.