Given the talent management industry’s relatively short evolution and the vagaries of economic trends that are difficult to operate within—not to mention accurately predict—how can talent management firms adjust their growth strategies to ensure their long-term sustainability? The strategic growth pundits like Michael Porter, Tracy and Wiersema, Hamel and Prahalad, Jim Collins, and more recently Lafley et. al. all seem to point to a couple of consistent themes, namely focus, differentiation, delivery, and industry knowledge.

In The Discipline of Market Leaders, Tracy and Wiersema identify the three disciplines of market leaders as customer intimacy, operational excellence, and product leadership and are quick to mention that organizations need to select one of these on which to focus and thus differentiate themselves from the competition. They note that very few successful enterprises have been successful at even two of these strategies simultaneously.

Porter’s Competitive Advantage defines cost, differentiation, and focus as the three generic strategies, and in Competing for the Future, Hamel and Prahalad discuss reinventing industries and regenerating strategies by shaping the future industry structure, and competing for core competence leadership by effectively ensuring industry foresight and intellectual leadership. Much like Hamel and Prahalad before them, Kim and Mauborgne’s Blue Ocean Strategy focuses on value innovation by creating uncontested market space, making competition irrelevant, capturing new demand, breaking the value-cost trade-off, and pursuing differentiation and low cost.

Jim Collins, in his recent books Good to Great and Great By Choice, highlights the importance of strong leaders and their teams with the concepts of Level 5 Leadership and 10X Leadership, respectively. And, more recently Lafley, et.al., in their Harvard Business Review article, “Bringing Science to the Art of Strategy,” address how to narrow down novel strategic options to the one choice most likely to succeed through a focused seven-step scientifically rigorous process. Certainly, there are many more strategic growth patterns, but regardless which is chosen, the commonalities are greater than the differences. Let’s first look at the idea of “focus” as a growth strategy for talent management firms.

It is easy for a basically entrepreneurial-led industry to chase the proverbial next shiny object. Indeed, what sometimes makes such ventures successful is that they have a vision for the future that often takes them astray from the central theme and focus of their business. Yet, too many firms have moved away from their core capability to their—if not total demise—certainly stunted growth. Some years ago, a relatively large traditional business strategy consulting firm thought it could ride out the peaks and valleys of its consulting business, acquiring a firm that developed and delivered executive-level training programs. It hired very capable and experienced people to create a new division and expected its high-level client contacts would provide an easy path to purchase decisions. What it didn’t totally understand, however, was the true value proposition of its consulting vis-à-vis its training businesses. Nor did it realize the costs for producing, inventorying, and marketing the latter’s materials. The acquired firm’s cost structure just didn’t fit the acquirer’s labor model, so when people in this division didn’t show billable hours, they were immediately branded as sloughing off. As expected, the training division had a short life span.

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Similarly, many years later, another strategy consulting firm merged with a traditional custom training business, assuming that its sixty-some consultants would be readily able to sell the training programs around leadership, sales, and service. However, those consultants weren’t motivated to sell training because it worked against their building up billable hours. They didn’t really care to understand how their clients would benefit from these new services, and as it turned out, their clients weren’t the buyers of training. Several years later it became clear that little-to-no value was being created by merging the two firms, so they severed their ties.

A third example involved a large loyalty marketing consulting firm buying a training company on the premise that adding a training and education capability would enable their clients’ employees and customers to be better educated on the loyalty programs put in place. Again, with an already existing, large, worldwide salesforce, it was thought it would be easy to open the necessary doors for this additional offer. Four years later, when it was clear this strategy deferred their focus, they divested the training business. In each of these cases, the consistent issue that caused failure was the lack of focus on what these firms did best, or, as once characterized, their inability or unwillingness to “stick to their knitting.”

What examples can you offer where focus was an extraordinarily successful strategy for a talent management firm? What examples can be offered where lack of focus was responsible for a firm’s lack of growth or even total failure? Please share in the comment section below.

Check out Steve’s full series, Managing and Growing Talent Management Firms.