Winter is nearly here. As we do every year at this time, my wife and I cleaned up the front lawn to prepare for spring (those of you who know me well know that it was mostly my wife). This year, we cut back one of our rhododendrons — extremely, down to the very small stubs.
It was an alarming change. But I wasn’t worried; we’ve done this many times before. And while it may seem counterintuitive to cut something down to make it stronger and healthier, any experienced gardener knows that to get the future results you want, short-term sacrifice is often necessary.
The same rule of thumb applies with strategy — choosing what to do or not do, what to keep and what to trim. Unfortunately, many businesses, for-profit and nonprofit alike, resist this type of productive “pruning.”
The Temptation of Growth
At some point, most organizations experience a slowdown in the growth of their core offering(s). A typical response is to try and make up the difference with new products, programs, or services. That’s fine, and not illogical.
Often, however, the organization finds itself in a new business with new services. Sometimes these offerings are a close strategic fit. Other times, they are far from the organization’s core competencies.
When that happens, and while it’s true the new offerings may bring additional revenue, they can also bring added complexity and distraction from the core business, draining precious human and financial resources in the process.
For example, I worked with a nonprofit that, prior to my arrival, had gradually added programs to the point where they had 14 different offerings targeted to three completely different audiences. They were struggling with both revenues and impact, not to mention having a difficult time explaining to anyone — prospective donors and others — what exactly their mission was.
So we cut everything back that did not support their primary objective. Yes, that meant eliminating most of their programs. But as a result, they were once again able to focus intently on the services that remained, increasing both their impact and donor funding as a result.
With that in mind, here are some things to think about as you evaluate and consider cutting back your own operations…
#1. Make sure you actually have a problem.
I worked with a tech company that offered a unique approach to customer surveys. After a rapid, initial start, growth began to slow. They assumed they had maximized potential for that service and began considering other options.
But… upon further investigation and analysis, it turned out they had barely scratched the surface (they had been targeting the wrong decision makers). By changing their sales and marketing approach, they returned to significant growth without needing to add alternative services and all the complexity that would have come with it.
So before you take corrective action, make sure you really have exhausted options along your current path.
#2. Don’t postpone the inevitable.
The old adage about staffing — hire slowly, fire quickly — often applies.
Organizations tend to have an emotional attachment to the programs or services they offer, even as market needs evolve and new offerings start to gain traction. The people directly responsible for said programs and services may be especially resistant to having them eliminated.
One way to make an objective assessment is to consider whether, if you were starting today, you would introduce the existing services or not. If the answer is no, the best move is to act now and redirect those resources to more fully support newer offerings.
Better to pull the plug on declining programs before you are forced to do so.
#3. Consider the timing for phasing out programs.
While waiting too long can be a mistake, pulling the plug too quickly on existing programs can also be problematic.
I worked with a marketing company that focused on generating word of mouth marketing for consumer products. Their analysis suggested that part of their offering would ultimately be taken on by larger, more well-resourced marketing agencies. So they prepared to immediately discontinue that part of their services.
But while their assessment was correct, we believed it would take some time for competing agencies to overtake them. We recommended a slow, orderly exit, allowing our client to continue benefiting from associated revenues for a few more years.
In this case, exiting too soon would have surrendered valuable revenues for no good reason.
Reflections
In the entrepreneurial world, it is often said “you can’t shrink to greatness.”
And while it may feel more “productive” (and certainly more exciting) to build than cut, a well-thought-out and managed pruning is often the best solution for improved performance.
