Five Strategies for Diversification

Five Strategies for Diversification


The ability to attract and lead talented people is at the heart of business success. Unfortunately, all too often these skills take a supporting role to the company’s core business. In reality, expertise in human capital is at the core of operational success and can be a springboard to expansion.

A CEO who demonstrates leadership in developing teams, infusing work and value ethics into a company’s culture, and reliably responding to client feedback can run a variety of businesses and diversify.

With diversification come the benefits of new revenue streams, growth, and the protection of income from different industries. Here are strategies to diversification:

Ask Existing Clients for Their Ideas  

Clients are in an extraordinary position to offer candid, first-hand insights into a company’s performance and its leader’s personal strengths. The CEO who isn’t afraid to ask, “What do you see in me? What else can I be doing?” might discover the client thinks they have the deal-making talents or management capabilities that can translate into a new venture. The conversation may even prompt the client to propose a new collaboration.

Cultivate A Client Partnership Before Launching the Business

It’s a well-known adage that it’s easier to grow an existing client than win a new one. The same might apply to starting a new business line or company. The strategic CEO can explore existing client relationships to identify a person with the knowledge, influence and trust to serve as a champion for the new business.

Together they can brainstorm on how to fill supply chain gaps or drive needed innovations. For example, the client may need to outsource entire segments of its operations such as logistics, assembly, manufacturing or publishing. They may need an offshore supplier of labor sources in Mexico or Canada. Or, they may need a subcontractor to augment the services of one of their major suppliers. All present actionable opportunities for a CEO to start a new company – in a new vertical or location – to meet the needs of an established client.

Be Willing To Wear Many Hats at the Beginning

Once the new initiative is identified, the CEO bears responsibility for honoring the client’s trust, and ensuring the positive brand characteristics of the flagship company that earned the trust in the first place are carried through in the new company. This means being personally involved in all aspects of the company – management, safety, coaching, and finance. Clients will expect it, and employees will learn from it.

This doesn’t mean micro-management, but it does require visible leadership, whether in the office or on the factory floor in commitment, quality, and service. The CEO’s role is to set the tone at the beginning and there is no substitution for putting in the time, getting to know the people, and showing them how their functions should be done. A positive, collaborative attitude goes a long way in generating enthusiasm; for example, acknowledging employees’ performance – even if it is as basic as good attendance.

Think Like a Big Company and Demonstrate Scalability

Not only do diversifying CEOs need to think creatively about solving their client’s business needs, but they also must move boldly to build a team that delivers. That requires an up-front investment in the right people to get the company running, plus a longer-term plan to ramp up on quickly as the business grows.

 Be Fearless

There’s no question that starting a new company takes courage. Going into the unknown can keep a CEO up at night; but, taking control of all the factors that could go wrong mitigates the risks. Armed with a strong value proposition, excellent people, and client support, the new company is poised for success.

Ultimately a CEO in the “people business” can be motivated by the worthy outcomes of a new company: creating value in the marketplace and new jobs for the community.


Rosa Santana

Rosa Santana is Founder and CEO of Integrated Human Capital (IHC), and Forma Automotive, both WBENC-Certified and NMSDC-Certified. With offices in San Antonio, El Paso and Austin, IHC is a staffing services company working with Fortune 500 companies throughout the U.S. and Mexico. Forma Automotive is a new company assembling Tacoma truck beds at Toyota Motor Manufacturing, Texas (TMMTX).

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