Alfred A. Marcus, a professor at the University of Minnesota, Carlson School of Management, reviewed detailed performance metrics for the 1,000 largest U.S. corporations, identifiying the 3.2% that have consistently outperformed their industries for a full decade. In his book, Big Winners and Big Losers: The 4 Secrets of Long-term Business Success and Failure (Wharton School Publishing), Marcus explains the strategies these companies followed, how they found opportunities in markets that others didn't see, and how they managed the tension between agility and discipline. Below is an excerpt from Chaper Seven, titled "Focus."
Winning companies moved into sweet spots and defended them, but they did not stop there. They deepened their position. They enlarged and extended it. They were focused. Their concern was with meeting the critical needs of their customers. Their global reach was consistent with these principles. They reduced their risks by limiting themselves to their core competencies and steering away from activities that might easily involve failure.
Focus on Core Strengths -- Stick to Your Mission
Big winners focused on their core strengths. They stuck to their mission. This lesson is illustrated by six traits that the big winners exhibited. Big winners (i) streamlined by spinning off noncore businesses that detracted from their mission, (ii) focused away from activities that had high risk of failure, (iii) gained flexibility by allowing other companies to assume the risks of development, (iv) exploited brands through sequels and related products, (v) reached out through new channels, and (vi) totally dedicated themselves to customer categories. Ball, Forest Labs, Brown & Brown, Activision, Dreyer's, and Family Dollar provide examples of the big winners' focus on their core strengths.
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