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Teaching a horse to fly Featured

9:37am EDT July 22, 2002

The Dervishes have a long history of using stories to instruct. I will tell you one of my favorites.

A horse thief and his partner were caught red-handed and sent before the local ruler for sentencing -- traditionally the death penalty. Just before sentencing, the thief made this impassioned plea:

"Oh great ruler, I am worth so much more to you alive than dead. You see, I was stealing this horse in order to teach it to fly, and then to give it to you as a gift. Should you see fit to commute our sentence, I will continue as before, and present you a flying horse in just three years."

The ruler, imagining the prestige and envy created by having the only flying horse, agreed.

"You and your assistant shall have room and board in the royal household, and unlimited access to the stables," he said. "I will see you in three years."

When the thief and his compatriot were finally alone, the compatriot asked, "What are you doing? You know you can't teach a horse to fly. In three years, we face a certain death sentence!"

The wise thief countered: "Besides the fact that we now have three luxurious years in the royal household, four things could happen in the next three years: The ruler could die; we could die; the horse could die; and who knows, we just might teach that horse to fly!"

In the next three years, at least 14 things could happen in your business. The question is, are you going to let them happen to you, or are you going to make proactive decisions to control which of them will unfold?

This column outlines the principal grand strategies available to a business. In the coming months, I will elaborate on the details of the strategies and when and why they may be appropriate for you. Incidentally, the number 14 holds nothing magical; some scholars use more, others less. What's important is that you be systematic in assessing your options so that none is overlooked.

Here is a simple but comprehensive list to consider in staying on top of what may occur over the next few years.

1. Concentrated growth. Keep doing what you have been doing because it has been so successful.

2. Market development. Enter new geographic markets.

3. Product development. Bring new products to market.

4. Innovation. Concentrate on research and development to change the nature of your industry's technological base.

5. Horizontal integration. Buy your competition.

6. Vertical integration, forward and backward. Buy a supplier, distributor, or retailer.

7. Concentric diversification. Buy into related industries, or perhaps machinery related to your core business.

8. Conglomerate diversification. Buy companies that are utterly unrelated to your business.

9. Turning things around. Actively and aggressively examine and repair your core business, usually with an eye on cost savings, process improvement, new technology introduction, changing vendor relationships or some combination.

10. Divestiture. Get rid of unprofitable or undesirable product lines or business units.

11. Liquidation. Acknowledge your failures, cut your losses and go out of business. Sell everything.

12. Joint ventures. Enter into agreements with suppliers, customers, competitors or appropriate others to create win-win situations.

13. Strategic alliances. Work with companies which otherwise are competitors to achieve mutually beneficial goals that are clearly delineated (like joint technology development).

14. Consortiums. Partner with other organizations (typically in your industry) to achieve outcomes beneficial to your industry.

I will elaborate in future columns. In the meantime, start thinking about your flying horse.

Lance Kurke, Ph.D, is president of Kurke & Associates, Inc., a Pittsburgh-based strategic planning firm. He is president of the CEO Club of Pittsburgh, serves on the faculty at Duquesne University and is an adjunct at Carnegie Mellon University. Reach him at (412) 281-2930 or at kurke@msn.com.