"Diversification is protection for ignorance" - that should grab attention, surely diversification is a good thing. How often do we hear that diversification is an appropriate means to manage risk, minimise our exposure to changing market and environmental conditions?

Far from mitigating risk, a diversification approach can actually increase risk.

The argument against diversification stems from the approach that a business focuses on one or two enterprises and develops an intense understanding of those factors that drive business performance.

For example let's consider a sheep breeding business where the core breeding components are joined to Merino rams, the balance joined to a terminal sire in the belief that the off type will yield a greater return.

In doing so we have ended up with a “bitsa everything” being distracted and not executing each stage as well as it needs to be.

What would it look like if we focused on building a very deep understanding of all those factors that affect enterprise productivity, and in turn drive operational excellence concentrating knowledge and intelligence?

Building deep understandings, not fragments across a number of enterprises.

Do one thing well, tell one thing well - isn't that the more effective risk mitigation process?