Can companies balance the need for focus with the drive for diversification? Ori Mendi explores the tension and explains why people may hold the key.
*Read the original article in Hebrew>
In many conversations with successful entrepreneurs, I asked what mattered most in achieving their success. The answers often included three key factors. First was people. Second was focus. Third was business diversification.
What stood out to me was the tension between the second and third. When you are focused on something, you commit to doing it as well as possible, not to diversifying it. But when you pursue diversification, you risk losing focus. The question is whether this contradiction can be resolved. The answer may be rooted in the first factor, which is people.
Focus vs. Business Diversification
Imagine you have built a great SaaS product. You are focused on driving user growth through organic traffic, and that channel continues to scale. Then, an opportunity comes along to build a sales team in the United States. Doing so will require significant time and attention, which could reduce your ability to grow the organic traffic channel that is already performing well.
This creates a dilemma. On one side is the desire to stick with what is already working. On the other is the need to diversify because relying too heavily on a single channel can be dangerous. One external change could disrupt everything.
One Person or a Small Team Can’t Do It All
For a single individual or a very small team, managing two strategic paths at once is nearly impossible. This is why, in the early stages, many companies must sacrifice diversification in order to maintain focus. Later, when the business is more mature, it becomes possible to invest in hiring new leaders. These leaders allow the company to add new initiatives while preserving focus.
How to Do It: Search and Hiring Strategy
A company is defined by its people. When people say a company is great at technology or marketing, they are usually referring to a leadership team that excels in those areas.
This is why everything starts with hiring the right person for the job. When the goal is to diversify products or business areas, the objective is not just to manage an existing operation. The real mission is to take full ownership of a new domain that may not yet exist or is still in early development.
This kind of responsibility requires a different type of leader. The ideal candidate is not only a skilled operator but also has entrepreneurial instincts and strategic vision.
From the very beginning, your search should target a manager who is capable, independent, and able to think broadly. These qualities will allow that person to succeed, build out new specializations, and develop new lines of business that align with company goals, all without disrupting the core team's existing focus. This sounds simple in theory, but in reality, it is incredibly hard to achieve.
For a single individual or a very small team, managing two strategic paths at once is nearly impossible. This is why, in the early stages, many companies must sacrifice diversification in order to maintain focus. Later, when the business is more mature, it becomes possible to invest in hiring new leaders
How to Do It: Onboarding and Execution
Now that you’ve hired the right person, what comes next? It is essential to make sure that the manager truly owns the domain. Ownership must go beyond the title and be reflected in actual responsibility.
It is the company’s job to support that transition. Here are the most important ways to do it:
Invest in training: The company must dedicate time and resources to help the new manager reach a level of expertise that removes dependency on the existing leadership. This protects the original team’s focus and allows diversification and focus to coexist.
Create accountability checkpoints: The new manager should be expected to provide regular progress updates. More importantly, they must deliver structured reports on how the new area is evolving, which decisions have been made, and what is planned next. They need to explain how their work impacts financial results, share wins, and outline how they intend to improve weaker areas.
Push them into the deep end: Let the new manager fully take on the challenge. This does not mean abandoning them. You still need feedback loops and checkpoints to ensure they are on the right track. But avoid overprotecting them or delaying their independence. Full ownership and real-world experience are what lead to deep learning and meaningful results.
The Bottom Line
Success in this challenge increases the likelihood that your company can grow through diversification without losing focus on core operations. This is crucial because in today’s constantly shifting environment, standing still is not an option. If you are not moving forward, you are falling behind.
.avif)
