Is the way you identify your business limiting it?

Why aren’t railroad companies a thing anymore?

The classic business school example of this features the railroad industry. We don’t think much about railroads. There’s a reason for that. Railroads used to be the best way to get cargo anywhere on land. Freight trains can be a mile or two long and carry much more, far more cheaply, than trucks. Airplanes were new and expensive. Railroads weren’t interested in trucks, air transport, or boats. They were railroads.

What if something originated overseas and had to get to Denver, Colorado? It would travel on a boat and train. It might travel by truck to get to the boat or from the train to its destination. The buyer had to contact and coordinate with multiple transport companies. Schedules were difficult, resulting in delays. The inefficiencies raised the cost.

This created an opportunity for companies that didn’t think of themselves as railroads, shipping (by boat), or trucking. They thought of themselves as logistics companies. They had their own trucks, boats, and railroad cars. With one call you could get things from source to destination. They even had warehouses, so if you wanted to store your stuff until you needed it and have it delivered, you could.

Over time, the rise of companies with a broader vision that better matched the customer’s needs caused “railroad” companies to go into decline. Today, there are no railroad companies that don’t also do logistics.

Avoid identity traps

Have you ever heard of a person or business being “overly specialized?” It’s the same thing. It’s an identity trap. Specialization is just focus and can increase your capabilities. But if those capabilities aren’t relevant to people’s needs, then they do not matter.

The lesson to be learned here is that when you identify your business with a label, you are limiting it. What happens when things change? What if the customer has other needs? Don’t let an identity or focus turn into something that avoids addressing the needs of yourself or your customers.

The way you identify yourself can also limit your business

When you say “I make (certain) things,” “I’m an artist,” “I don’t do [fill in the blank],” or “I only do [fill in the blank],” you limit the opportunities available to your business. You also limit the effectiveness of your management and oversight, if you don’t pay attention to those areas.

Identity vs Reality

You are not the role you play. You are more than that. You are not just a creator, coach, or consultant. Your business is not just what it’s called. It’s not just a store or a service, or whatever it’s doing right now. How you label your identity is not a limit on reality for you or your business.

You are what you think, dream, feel, and do. Your business is a strategic direction, resources, and capabilities. When you stop dreaming, have no strategy for the future, aren’t gathering the resources you will need when it’s time, and aren’t leveraging the possibilities created by your capabilities, then you limit the growth of your business. And of yourself.