Are Your Protecting the Golden Goose?

“We have to protect the golden goose.” Some version of this phrase comes up often enough in family business conversations that articles like this one in Family Business Magazine use it without explanation.

When I hear it, the phrase is almost always said in response to a proposed change: a new market, a repositioning, a product line someone wants to cut. It’s meant to impart prudence. To remind the room of all that depends on the business, both in the family and the wider community. 

We have something good here. Don’t be reckless with it.

What the Phrase Assumes

What’s interesting is what the phrase assumes: that we know what the golden goose actually is, that our current decisions are protecting it, and that the proposed change is threatening it. In my experience, it’s possible that all three of those assumptions may be wrong at the same time. 

This is exactly what happened at Data Management, Inc.

DMI was a generational family business that had provided a great living to a large family, opportunities for philanthropy and passion projects, and employment to a community.

But when it came time to grow again, any proposal for evolution was met with polite veto: We can’t kill the golden goose.

The assumption here was that the “golden goose” was the business as it was currently run, dependent on some large but shrinking relationships with legacy customers selling very commoditized products. Those were currently being protected by creating a convoluted and sprawling portfolio of brand names and product lines, and by deploying a large sales force that was working harder and harder to serve a market with diminishing margins.

The idea of repositioning the company in a higher value market and focusing on one highly differentiated product line with protected IP was seen as a threat to what had served this family and community well.

Until the leadership team heard from Brad.

What They Found Instead

Our team at Six-Point interviewed both legacy customers and customers in the new market the company was considering. When we presented the anonymized “voice of the customer” results back to the team, the contrast was immediately apparent. The legacy customers we talked to all spoke of margin pressure, budget cuts, increased options, and lack of time and resources. The new customers spoke of investment, quality, and the importance of innovation and technology to help them solve high-value problems.

At some point during the research presentation, the DMI team nicknamed these new customers “Brad.” Brad valued what made their products different. Brad had a growing budget. (They liked Brad.)

We paired this voice of customer qualitative data with their actual numbers: product margins, cost of sale, and average initial order size for each customer segment. (Now they liked Brad even more!)

The information had been accessible to them all along, but they had never looked at it this way.

All of a sudden, they realized that their real “golden goose” was this intellectual property that had developed over a decade. And by diverting resources to low-margin, commoditized product lines and customers, they weren’t protecting the goose. They were starving it. Finding more Brads (not defending legacy accounts) was the path to the next wave of profitable growth.

All three assumptions they had made were wrong. And “what would Brad want?” became the new office mantra.

So, the next time someone tries the golden goose veto, ask the question: