Are you focused on the right things?

16 February 2026

Early in my career, I sat in a key business meeting with a major retailer watching a competitor win shelf space we'd held for more than a decade. They'd launched a 'better-value' version of our hero product—and we lost.

We thought we'd been doing everything we could to stay competitive. Our focus was on price and quality optimisation. But our competitor had identified the opportunity to beat us on price with 'like' positioning. They knew the customer would respond to their product positioning signals (while we were indignant about what we thought was inferior quality).

We'd been so focused on doing our current business better that we never saw the market shift coming. We didn't understand the customer.

If this sounds familiar, you're not alone. And more importantly, it's preventable.

The Two Strategic Perspectives

I often see SMEs, particularly in manufacturing, focus on initiatives that exploit their current business. These are activities like:

Improving processes to reduce costs
Building strong team culture
Refining operations

These efforts are essential. They help you compete, deliver quality products, and make a profit.

Less often, businesses focus on initiatives that explore what's next. These are activities that:

Address emerging customer needs
Test new market opportunities
Keep you relevant for the future

Too often, exploration only happens reactively—when the market shifts suddenly, when retailers apply pressure, or when competitors start winning your customers. In the worst case, a competitor's innovation makes your product or value proposition obsolete.

Questions to Frame Your Thinking

Exploit questions:

How are we leading and organising the work?
How do we optimise and scale what we do?

Focus areas: Team and Culture, Systems and Processes

Explore questions:

Are we working on the right things? Are we solving the right problems?
What are we learning and testing for the future?

Focus areas: Customers and the Market, New Product Development

The Resource Challenge: How Can You Do Both?

As someone who (now) naturally thinks about the future, my first instinct is to say you should do more exploration—learn what's happening in the market and what your customers truly care about. Make sure you're ready to solve their next problem.

Research 1 shows that engaging in this work has a compounding effect:

Your organisation gets better at it over time
You increase your ability to seize new opportunities
You build real competitive advantage

The Problem with Doing Both at Once

I see this pattern repeatedly: A founder splits their week between firefighting operational issues and trying to plan for next year. By Wednesday, they're mentally exhausted. By Friday, the 'future thinking' time gets pushed to next week. Again.

A study 2 has found that doing both at the same time—what academics call being ambidextrous—actually hurts SMEs. With limited people and money, your attention gets stretched too thin between these two different perspectives.

The Solution: Sequential Switching

Switch between phases of exploration and exploitation based on where you are. This approach is called sequential switching.

How Do You Know What Phase You're In?

So how do we know what phase to be in? What are the signals that it's time to switch? How can busy SME leaders make sure they're focused on the right things?

Start with Where You Are Now

First, assess where your business or product portfolio currently sits. Then you can reflect on which activities will be most beneficial.

Two models I keep coming back to:

Model 1: STARS (Assessing at the Business Level)

The STARS model by Michael Watkins from his book The First 90 Days was originally designed for leaders stepping into a new role. The model shows where a leader should focus based on the phase their business is in.

Model 2: Product Lifecycle (Assessing at the Product Level)

The Product Lifecycle Model pairs well with the STARS model. It maps the phases of a product or service's life in the market, tracking the trajectory of sales over time.

Image Source (https://www.business-to-you.com/product-life-cycle/)

These models work well together. The core difference is perspective: are we thinking at the business level or the product level?

STARS / Product Life Cycle situation	Explore or Exploit Perspective
Start-up / Introduction Problem–solution fit, rapid learning, building from scratch	Explore. Focus on learning what customers want and will pay for. Test problem-solution fit through rapid experimentation.
Accelerated Growth Scaling what works, capacity, systems, speed vs stability	Exploit. Scale what's working. Optimize processes, reduce variability, improve costs, and maximise market capture while demand is strong.
Sustaining Success / Maturity Optimisation, efficiency, protecting the core	Early: Exploit. Continue refining processes, quality, and costs. Maximise penetration in existing markets. Mid-late: Switch to Explore. Ask: Does our product need a refresh? What should we test now that might replace today's offerings? Focus on maintaining future relevance before decline forces your hand.
Realignment / Late maturity / early decline Relevance, renewal, reframing value	Explore (reactive). Most businesses reach this phase unprepared and are forced into exploration mode—testing new approaches and making significant pivots to restore relevance.
Turnaround / Decline / Crisis Survival, focus, decisive intervention	Avoid. At this stage, focus shifts to triage: cut underperforming products, contract operations, and make difficult decisions quickly. Prevention through earlier exploration is far better than intervention here.

So what does this mean for you? Let me be direct: most of the SME leaders I work with are in Early or Mid Maturity. And most of them are still running plays from their growth phase.

They're optimising a business model that may not be relevant in 24 months.

The Bottom Line: Know Your Phase, Then Act Accordingly

The key insight: The right focus depends entirely on where you are right now.

So What Should You Actually Do?

The table above gives you the map. But here's what it comes down to: if you're early in your journey, exploration is your job. If you're scaling, squeeze every bit of value from what's working. And if you've been in maturity for a while and haven't looked up from operations recently? That's your signal. Start asking what's next before the market answers for you.

A Real-World Example

Last year I supported a pet food manufacturer launching their first ecommerce channel. For 20 years, they'd sold exclusively through grocery retailers.

Their plan? Lead with their flagship product—a premium chilled line that had been their retail cash cow for decades. They also wanted to test new ambient innovations, but those felt secondary.

The problem: they were in exploit mode with an explore decision.

They assumed their hero product was their strongest offer. But chilled pet food is expensive to ship, requires customers to be home for delivery, and has a completely different value proposition than shelf-stable products.

When we finally spoke to customers, the assumption fell apart. Customers valued the ambient lines just as highly as the chilled products—and the ambient lines solved real problems: convenience, no delivery stress, easier storage.

The team made the call: they cancelled the chilled line and focused entirely on the ambient range.

Sales took off. Shipping costs dropped. Customer experience improved. And the team stopped splitting their attention across two incompatible strategies.

The insight wasn't complicated. But it required exploration—asking the right questions before scaling the wrong answer. 🤜🤛

Sequential switching works because it matches your resources to your reality. You can't do everything at once. But you can do the right thing at the right time.

Three Questions to Ask Yourself

Where is your business or product portfolio right now?
Are you exploiting when you should be exploring?
Are you exploring when you should be scaling?

The answer will tell you where to focus.

Research References

Elsbach, K. D., & Stigliani, I. (2018). Design Thinking and Organizational Culture: A Review and Framework for Future Research. Journal of Management, 44(6), 2274-2306. https://doi.org/10.1177/0149206317744252 (Original work published 2018)
Wenke, K., Zapkau, F. B., & Schwens, C. (2021). Too small to do it all? A meta-analysis on the relative relationships of exploration, exploitation, and ambidexterity with SME performance. Journal of Business Research, 132, 653-665. https://doi.org/10.1016/j.jbusres.2020.10.018

If you're asking yourself any of these questions right now:

Why aren't we selling more?

Where should our focus be?

How can we execute faster?

I'm Olivia Ratten, a fractional growth strategist for family-run businesses and manufacturing SMEs. I help teams cut through noise and wasted effort so they can focus on what actually matters.

Contact me. Let's talk about where you are and what's next.