Analysis Dima Malenko Analysis Dima Malenko

A farm and a zoo

Have you ever visited a farm? A farm which produces milk, or meat, or even wheat, or corn? If you've been there, I'm sure, you've seen many interesting things all over the place: tools and mechanisms, people and animals. I'm also equally sure, you haven't seen there one thing - variety. Meat farms do not breed cows, pigs, chicken and rabbits. Milk farms do not feature cows together with goats on their premises. Grain farms do not harvest dozens of kind of grain. Instead they specialize in something and they try to stay as uniform as possible with respect to animals they grow, grains they seed and tools they use. Why do they do that? Because variety inevitably means higher costs of operation, but farms can not benefit from variety. For them it makes a lot more sense to have 200 cows of the same kind, than 100 of one and 100 of another since they require different treatment thus rising the cost of support.

On the other hand there are enterprises, which directly benefit from variety - zoos! The more different species you have in the zoo, the more money you can charge for entry tickets, the more visitors you can attract. Yes, operational costs go up as you add more animals - obviously lion requires completely different conditions than pelican, and most likely you will need two different people with different skill sets to look after them. But since you are able to directly sell this variety to customers, it does not undermine your profits.

So, the difference between a farm and a zoo is in their relation to variety: it kills the farm, but propels the zoo.

We see examples of both in our day-to-day lives. We enter farm land, when we rent a car, call a taxi, use corporate computer, eat in McDonald's. We go to zoo, when we shop in the mall, eat in the restaurant, buy a vacation tour.

Look at you business, department, or team and see what you are running - a zoo or a farm. Chances are that you are running a zoo, when you should be running a farm. Run a farm unless you really know how to benefit from variety, which zoo has to offer.

Read More