A balance of internal and external
focus is necessary to establish and maintain market leadership. Too much focus on internal efforts (bottom line driven) will make a
company competitive today at the expense of the future. Too much focus on external efforts (revenue driven) will result in orders that
over-tax operations -- resulting in inferior quality, higher cost production and potential loss of market share.
Companies that become too lean, make it very difficult to maintain a healthy internal and external balance. Pressure to make short term financial goals tends to force companies to focus internally on costs, often at the expense of the long term health of the organization -- losing their
edge in product, process, technology, market and business expertise.
The lack of external focus often means many financial opportunities go by the wayside - either
by not happening at all (bad -- no investment, no gain) or taking so long that an opportunity is missed (worse -- lost investment, no gain).
Companies must constantly embrace the strategic questions of competitive advantages and disadvantages to achieve the balance that is right for their company.