It is my contention that the most highly differentiated firms are always the ones that take a singular focus to their positioning — an engineering firm that works exclusively in the power industry is inherently better positioned than one that’s straddling itself between both the power industry and the transportation industry. Here’s why:
#1 – Memorability.
It’s simply much easier for a prospect to remember who a firm is and what it does when that something is very clear and very narrow. “Sargent & Lundy = Engineering for Power Plants,” is a simple message for anyone in or near the A/E/C industry to understand and remember. If the message were, “Sargent & Lundy = Engineering for Power Plants + Roads and Bridges,” suddenly it’s significantly less clear and more difficult to remember. 
#2 – Depth.
A firm with a singular focus can build deeper, more valuable expertise over time through the work it delivers to the marketplace. This depth in work not only increases credibility for the firm to win more work within its narrow area of focus, but also deepens the firm’s expertise to deliver the work more efficiently and more effectively over time.
#3 – Advantage.
Let us not forget the top reason a firm endeavors to differentiate itself — to create an advantage. The depth in expertise that a firm builds by operating within a single focus can create a nearly impenetrable strategic competitive advantage that manifests itself through lots of valuable experience. At one point in time, Sargent & Lundy claimed to have designed roughly 50% of the world’s power plants. That depth of experience can carry with it a price premium that the best clients are willing to pay to ensure the work is done absolutely right.
What To Do When Singular Focus Is Just Not Possible
All that said, a decision to migrate a diversified larger firm with revenue pushing $100M to a single market focus may prove extremely difficult if not impossible. In fact, of the 113 A/E firms with revenue in excess of $100M only about 10% derive more than 90% of their revenue from a single macro industry sector.
Often, we find that middle market firms grow to some reasonable size through a variety of strategies that tend to erode positioning. Firms often respond to client needs and demands by adding new services. Simultaneously, they use acquisitions to expand offerings and create expertise in new markets. In summary, the strategies used to create growth stretch the firm and erode what differentiated it in the first place. For many of these firms, a single market focus may be simply too painful to swallow and could even cause too much damage to pursue quickly. So, how can these firms execute an expertise-based positioning approach?
Build a Grid
In our experience, when a larger firm sits down to list the services it provides and the types of clients it serves, the list can become uncomfortably long. We’ve seen firms providing well over 50 service offerings to clients in excess of 25 different industries. So, get out a piece of paper and draw a 3×3 box. Identify three services you feel you have a chance to be the best in the world at and write them next to the three rows. Identify the three industries where those services are most valued by your clients. This should yield no more than 9 things to market (3 services in each of 3 markets). The process by which you do this is irrelevant – if it takes a committee and 3 meetings, fine; just don’t let your 3×3 box become a 6×8 box.
Invest Marketing There
Only invest marketing and business development resources in those 9 areas. It’s okay to respond to inquiries from prospects outside those areas and there’s no reason to stop serving existing clients that fall outside those 9 areas, but it’s not okay to proactively invest any resources outside those areas.
While this approach lacks the simplicity of a single market focus and isn’t really a positioning per se, it will force the firm to deepen its expertise in a handful of areas and it will enable the firm to create advantage in those select areas over time. Chances are, in a few years you’ll be back at the table thinking about how to narrow your focus further.
