Diversifiction and Diversifact

Abstract

A spinning top is an apt metaphor for diversification that works. It requires sitting on a base of strong business, possessing substantial bulk in the form of planning systems and adapting mechanisms, and receiving thrust from the central management—all held together by a viable culture and maintaining its balance through its dynamic energy. This article develops the metaphor, links it to a number of corporate experiences, discusses the different tradeoffs in keeping a diversified enterprise in balance, and suggests a sequence by which necessary capabilities can be developed.