I’ve been saying this from the start. The cost in management time and focus is more than cash a lot of the time
The opportunity cost is massive, and boards need to be really careful. I've had boards in strategic planning days get really carried away trying to push the company in multiple directions under the guise of "diversification". What they often don't consider is, a) the amount of work some white board scribbles actually mean for the executive team, and b) the opportunity cost of splitting up the executive team's head into multiple pieces. When we're laying awake at night thinking about what to do next to improve the company, do the board really want multiple competing businesses occupying our heads? What thoughts, and subsequent executions, didn't our core business get because we were sidetracked? I find they often don't think about that when everyone's excited and having a circle jerk on the strategy day, and often the executive team don't either until the rubber hits the road.
The only way to do this successfully is to actually start another company with its own executive team, like Wesfarmers do, for example. Even then, you'd want your first company to be swimming in excellence first, which the AFC is not. And it's really not the sort of organisation to do it anyway. It's not a listed entity with the primary goal of shareholder return, and I don't believe in a company existing to serve another company unless it's a part of a vertical integration.
I really dislike what we're doing at the AFC.









