Diversification has been used as a tried and true business strategy for years. Organizations diversify for any number of reasons: a quest for growth, an answer to competition, a rise in demand. Inherent in all diversification activities is a certain level of risk. After all, entering into a new industry or market that differs from your current focus or speciality is indeed risky, and maybe even a little scary. But it's also where the impossible becomes possible.
Over the course of my career, I have found three truths imperative to company growth and diversification.
Reinvention is only possible when constant improvement is a critical component of the way you do business. Look no further than the stories of Blockbuster or Netflix. One managed to catch itself and change course to embrace disruptive technology. The other met a different fate.
Diversification is all about reinvention. Industry thought leaders are built by upending the status quo and doing things differently, something we strive for everyday at Reynolds Polymer Technology. Challenge your company to not only adapt to changing market conditions but embrace them in order to develop new and more sound products.
Develop a deeper understanding of your marketplace and marry it with operations to create a seamless client experience. A manufacturing company, for instance, could offer a full suite of services, from initial design all the way through to creation, implementation, and installation.
From a client perspective, continuous improvement looks like a tireless quest to find the right personalized solution. How do you deliver what your client never knew they always wanted? Take a lack of product specificity. Rather than seeing your client's inability to articulate what they're looking for, return to their vision. How can you make this a reality? Embrace the unique opportunity to think outside the parameters of a project and instead focus on the client's dream. Their inspiration can drive your innovation.
The famous quote from Ralph Waldo Emerson rings true here: "Do not go where the path may lead. Go instead where there is no path and leave a trail." The best, most innovative companies see past their current growth trajectory (and their competition's growth for that matter) and instead look to where they can break new ground.
When it comes to diversification, this could be disrupting your product's engineering process. What would happen, for instance, if you leveraged research and development dollars to challenge the way your product was created?
It could also translate into size and scope. Leading manufacturers look not only to their current processes, but to how those processes apply broadly across the industries they serve. For example, Reynolds Polymer Technology utilizes a unique, state-of-the-art technology to build world-class acrylic underwater viewing tunnels for some of the largest aquariums and zoos across the globe. We also utilize that same technology to build water features for medical centers, hotels, restaurants, and other customers.
The key to being disruptive is never settling for good enough. This evolution should permeate every level of your organization, from processes to technology to staff on the manufacturing floor.
At the end of the day, disruption and diversification need to be rooted in results. After all, profitability is proof that you have achieved a return on your investment.
To tie diversification into profitability, begin with an understanding of your core product. Study it. Know what it can do. Map its trajectory, from ideation to production and integration. Learn the "life" of your product. What stressors does it come under? What conditions might it face?
Then, work to understand its use in the market. Interview customers and get to the heart of how they view and use your product. How your product is leveraged in the hands of your potential client will be critical to your diversification efforts.
This is also where pricing comes into play. As you work alongside potential customers, listen to what they say about pricing. Don't shy away from the conversation. Rather, embrace a competitive pricing model. Get creative to deliver the same thing at a lower cost while still holding true to your differentiators -- functionality and quality.
We live in a world of constant change and disruption. Companies must learn how to harness diversification methods in order to stay cutting-edge and move the needle forward. Only then can you build the impossible.
Mark Johnson has served as the vice president of sales and marketing at Reynolds Polymer Technology in Grand Junction, Colorado, since 2015, piloting many initiatives of the world's leader in fully integrated, highly engineered acrylic solutions. Johnson's history with Reynolds extends back more than a decade as he served as VP of business development earlier in his career, before taking the helm of marketing communications.