Back your winners. It’s a simple business philosophy and one which worked very well for Ken Williams, founder of games software company Sierra Online.

For Ken, it meant putting a lot more marketing money behind products, which started to sell well, and more development money behind sequel products. And conversely, it meant less of both for less successful products.

Initially, I wasn’t sure I agreed with this philosophy – surely it would prevent some products from ever becoming great if they needed a little longer to come to fruition. But I have come round to it.

The sad part about it is how hard it is to implement in practice. A child psychologist on TV, a few weeks ago, explained how almost all parents pay more attention to poorly behaved children than those who are well behaved, incentivising all children to behave badly. Business is all too often the same – managers tend to address problems, which means that it’s all too easy to end up spending the majority of time on problem areas or products.

It’s probably easy to see how this applies to films, books, computer games and other similar companies. After all, who wants to see a sequel to a film, which was no good? But I am convinced the same philosophy can be applied to many types of business.

Historically, my management team here at Crimson has fallen into this trap. One of our magazines, What Laptop, for example, has been a delight ever since it was launched. It was well received by readers and advertisers alike, and has been profitable since launch. Which has meant that it has had almost no management time. It was only when a competitor launched against it, a year or so ago, that we began to give it some attention, which has revealed a number of ways to improve its performance. It is now even more profitable for us than it was a year ago.

I came across one company where certain senior managers actively tried to distort this process. They allocated certain costs, in particular marketing costs, to products according to actual sales of each product. This meant that the individual product profits and losses showed remarkable consistency, and made it look as though the managers had allocated the costs pretty sensibly. The reality was a mile from that. This suggested that certain products were far more profitable than was actually the case, and others far less so.

So ask yourselves how much more value you could create by spending more time on your most successful business areas? I suspect that many of you will generate a considerably better return from time spent there Growing 24 Business October 2004 than on fixing problems with much less successful areas.

On a different note, I feel I can’t let this month pass without expressing my disgust at the new employment legislation – Dispute Resolution Regulations – which will come in to effect by the time you read this. Britain has been a good place to do business relative to countries such as France, and our economy’s performance has reflected that. It’s crucial for maintaining enterprise in this country that we can try things without being penalised if they don’t work. The government is harming our economy by trying to harmonise employment laws with Europe, where so many economies have massive unemployment because entrepreneurs know that the cost of an employee not working out is so high. At the same time, government claims to be encouraging a culture where business failure is more acceptable. Make your mind up guys.

I’m not advocating poor treatment of staff, or that they have no rights – but there are limits, and we have reached a a level already where staff are now highly protected. The less time business leaders spend worrying about employment processes, the more time we have to build our businesses.

David Lester, founder of Crimson Publishing, has established or run half-a-dozen businesses, as well as advising others.