Leadership Lesson: Less Is Better

Freek Vermeulen, an associate professor at London Business School, just completed research on the Chinese pharmaceutical industry. He examined the success that companies had when they used multiple growth strategies (e.g., diversify, innovate, add new products to the portfolio; partnerships; etc.).

He found that companies failed when they did too much. Why? They ran into an unforeseen obstacle: management capacity. Here’s an excerpt from Vermeulen’s blog post about the research:

The results showed that, in isolation, each of these initiatives indeed stimulated growth; yet when used excessively or in combination they actually had a negative impact and hampered a firm’s growth prospects.

Hence, stop trying so hard! You might do better…

My take: Organizations almost always underappreciate two key constraints. The first is limited management capacity, as Vermeulen highlights in his research. The second constraint is the ability for an organization to absorb change. All too often, leaders focus on only one constraint: funding. Hopefully executives will learn that success takes more than just money.

The bottom line: Don’t lose sight of the less obvious constraints.

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I am an experience management transformist, helping organizations improve business results by engaging the hearts and minds of their customers, employees, and partners. My "job" is Head of the Qualtrics XM Institute. The Institute is still being established, but our goal is to help organizations around the world thrive by mastering Experience Management (XM). As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. And, as many people know, I love to speak about these topics in almost any forum. Prior to joining Qualtrics, I was managing partner of Temkin Group (leading CX research, advisory, and training firm), co-founder and chair of the Customer Experience Professionals Association (CXPA.org), and a VP at Forrester Research. I'm a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Check out my LinkedIn profile: www.linkedin.com/in/brucetemkin

4 thoughts on “Leadership Lesson: Less Is Better”

  1. I would agree with results of the study. Generally, when we overstretch, not only from a business standpoint but also from a personal standpoint, we tend to fail. Only handle as much as you can – successfully that is. Good suggestions.

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