A Case for Focus
For six years from 2001 and 2007—I was privileged to have been a part of the management team at Hampton Distribution Companies (HDC) in Sacramento, CA—a wholesale building products distributor. I was hired by Chris Walton, one of the brightest talents I’ve met in my career—and under his leadership—we succeeded in re-designing the sales organization, restructuring or eliminating non-performing business segments, winning an exclusive distributorship that doubled our business overnight, and reaching all-time highs in ROI. As I took over as general manager in 2004—we continued finding new ways to “reinvent” our company and the distribution function.
We took the company from 4 divisions and multiple product lines down to just 2 divisions and 2 products lines (Andersen Windows, comprising nearly 80% of our volume, and a complete line of residential door products—comprising the other 20%).
During that time, some people asked “Jeff—how could you allow Andersen Windows to become 80% of your business and put all your eggs in one basket?” To them I answered “In 2002, Chris Walton and I decided that if we were going to be an Andersen distributor—then that’s what we should do—with focus, execution, and commitment. We took the opposite approach of many of our competitors—who seemed to be adding more and more products each day.”
We followed Jim Collins’ advice in Good to Great and made Andersen our hedgehog. A hedgehog is:
- What you are passionate about.
- What you are best at.
- What you can make money at.
So, continuing along our determined path, we narrowed our product portfolio and increased our focus—to the point where we sold and supported just two product categories: windows and doors. Of course, we knew this put us at some risk–but the financial performance HDC achieved seemed to suggest we’d made the right decisions.
Yes, we were successful in many ways. HDC was an outstanding company made up of exceptional people. Externally, we excelled in the areas of business development through end-users, customer training and development, sales programs and promotion, value-added services, and attention to detail and execution to be the best we could be. Internally, we practiced continuous improvement, developed and empowered our people, measured constantly, promoted and rewarded desired behaviors and results, and shared information with employees to help everyone feel a part of the challenges, efforts, and success.
With this focus—we continued to hit all-time highs in profitability, improved customer satisfaction, and along the way—earned became a working model of continuous improvement.
Our sales force did a better job—not having to wear multiple hats, but rather—specializing in just one segment. Door sales people sold doors, and window sales people sold windows. We also learned from some minor mistakes along the way. Individual sales rep territory ownership and accountability is paramount in field sales. We dissolved the teams we’d established years earlier—and gave distinct and separate territories to our sales people—who then became accountable—and satisfied—managing all the functions in their market. They could now focus on a smaller geography and group of customers—providing greater involvement and impact.
This focus also allowed us rationalize our customer base—and aim at doing more business through fewer, yet more committed customers. As we reduced the number of low-volume customers we serviced, our overall volume actually increased, our costs of business decreased, and our customers received better service because we weren’t stretched so thin.
Is This Approach For Everyone?
Obviously not. Many, many organizations have proven that you can branch out, expand products and services, and grow successfully. I’m just providing one case for an organization who achieved quantifiable financial success by going the opposite direction—and focusing on those very few things we could do best. It’s up to you to decide which is right for you.