The Disaster Division as a Separate Diversification - Part I

May 11, 2011
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Commitment: The act of binding oneself to a given course of action; promising or pledging involvement.

Perhaps the best illustration of commitment comes from the country philosopher who, when sitting down to a breakfast of ham and eggs, noted the difference between involvement and commitment. “The chicken was involved in this project,” he thought. “But the pig was committed!”

You’ve heard the old saying, “If it’s worth doing, it’s worth doing well!” Good advice when it comes to any diversification, and this is especially true of diversifying into disaster services. Look at it this way: one contact in your on-location cleaning business is likely to result in a job totaling one to two hundred dollars that takes a few hours to process. Conversely, one contact in a disaster diversification could result in a $50,000 job that takes weeks of committed effort to accomplish.

But if commitment to disaster services as a totally separate diversification within your company isn’t made (assuming a reasonable population base of 30,000-40,000 within a 50-mile market area), not only will you be unable to process the work physically, but you’ll also cut off your very source of business, while destroying the morale of current, loyal employees. You’ll see what I mean as you read on.

The problem that consultants in this industry frequently see is that many companies that have already “diversified” are struggling along, just barely making it, because they’re still making many of the mistakes this series will address.

Ways to Diversify

There are two basic ways to diversify that merit review: vertically and horizontally. Vertical diversifications are made within the framework of an existing organizational structure – in the same market area, to the same customers, on the same vehicles, with the same personnel, and, basically, with the same equipment.

Vertical diversifications may include such services as upholstery and drapery cleaning, carpet repair, minor deodorization and the like. Note that water-damage restoration also may be considered a vertical diversification; it is a service that can be incorporated within the existing framework of an on-location cleaning business (processed by the same people, using basically the same chemicals and equipment with the same basic “carpet” expertise).

Conversely, fire restoration is a horizontal diversification: it cannot be accomplished within the confines of an on-location cleaning service organizational structure. It involves totally different time scheduling, different equipment and chemicals, different procedures, substantially different surfaces, etc. It must be organized and operated within the confines of the parent organization, but distinctly separate (horizontally displayed on the organizational chart) from the original services upon which the business was established.

If a restorer fails to provide distinct separation between horizontal diversifications and insists on using all employees and company assets to react to the situations presented each day, then loyal employees become confused and disgruntled. Ultimately, the loss of those valuable employees may bring a business to a grinding halt. More on this subject next time…

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