"Understanding Michael Porter: The Essential Guide to Competition and Strategy"
by Joan Magretta
Michael Porter, of course, has been a leading theorist in all matters strategy and competition for a couple of decades. His books, in addition to being physically weighty are often intellectually weighty and not viewed as easy reads. Magretta, a former strategy editor for the "Harvard Business Review" and author of the excellent primer "What Management Is" has done a fine job at providing an accessible but informative overview of Porter's ideas in about 200 pages.
Capturing the essence of the book in an epilogue, Magretta lists "Ten Practical Implications" of Porter's work. Those implications are:
1. Vying to be the best is an intuitive but self-destructive approach to competition.
2. Thee is no honor in size or growth if those are profitless. Competition is about profits, not market share.
3. Competitive advantage is not about beating rivals; it's about creating unique value for customers. If you have a competitive advantage, it will show up on your P&L.
4. A distinctive value proposition is essential for strategy. But strategy is more than marketing. If your value proposition doesn't require a specifically tailored value chain to deliver it, it will have no strategic relevance.
5. Don't feel you have to "delight" every possible customer out there. The sign of a good strategy is that it deliberately makes some customers unhappy.
6. No strategy is meaningful unless it makes clear what the organization will not do. Making trade-offs is the linchpin that makes competitive advantage possible and sustainable.
7. Don't overestimate or underestimate the importance of good execution. It's unlikely to be a source of sustainable advantage, but without it even the most brilliant strategy will fail to produce superior performance.
8. Good strategies depend on many choices, not one, and on the connections among them. A core competence alone will rarely produce a sustainable competitive advantage.
9. Flexibility in the face of uncertainty may sound like a good idea, but it means that your organization will never stand of anything or become good at anything. Too much change can be just as disastrous for strategy as too little.
10. Committing to a strategy does not require heroic predictions about the future. Making that commitment actually improves your ability to innovate and to adapt to turbulence.
I highly recommend this book.
By Mario Sikora
(for a pdf version of this article, please send an email to me at firstname.lastname@example.org)
Working with leaders, you can’t help but think a lot about leadership. Over the years I’ve developed a lot of opinions on the topic, and perhaps gained a few insights. In this post, I’d like to introduce the approach to leadership that I take with my clients, something I call “Awareness to Action Leadership.”
It’s important to define terms, so let me define what I mean by leadership. There are as many definitions of leadership as there are leaders and people writing about leaders, but this one works for me: successful leadership is the act of influencing others to effectively achieve a desired result consistently and over time. There are a couple of assumptions implicit in this definition, namely that leadership involves the engagement of others, that good leadership improves circumstances, and that in order to get results over time one must lead in a way that makes others want to follow. Thus, treating people well is inherently more effective than treating them poorly.
I’d like to start with some opinions I’ve formed:
There is no secret formula.
Leadership is very context specific; what works in one situation for one person may not work in another situation, or even for a different person in the same situation. Effective leadership requires adaptability to the variables of individuals, contexts, and goals. Circumstances may require a leader to call upon any of a very long list of skills, competencies, attitudes, or behaviors. The challenge is that we can never know in advance what those variables may be at any given time. Thus, a leader must be a student of leadership, continually improving his or her abilities, and constantly monitoring the environment for cues as to what abilities need to be developed. As Charles Darwin wrote, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” Nowhere is this more true than in leadership.