With all due respect, Mr. Porter...

Michael Porter has sold roughly eight ka-jillion more books than I have, so this may seem a bit audacious of me, But here goes, anyway.

I've gotten into the habit, over the past couple of months, of googling the phrase "being strategic" - mostly to make sure that someone hasn't purloined my title and beaten me to the punch, but also just out of curiosity. One entry that consistently shows up near the top of the Google-pile is an article (or rather, some excerpts from a talk) by Michael Porter at a Balanced Scorecard confab in 2002, titled "The Importance of Being Strategic." As you might suspect, I felt quite curious to see what Mr Porter had to say. So, I bought it from the HBR website, downloaded and read it.

It was interesting. And I have no doubt it was useful to the folks to whom he was speaking, who - in their post-dot-com-bust angst - seem to have been wondering if they should throw their strategy out with their internet investment bathwater.

At the same time, it reinforced my conviction that most people severely and unnecessarily limit their idea of what it means to be strategic -- Mr. Porter, again with all due respect, included. All of his comments focused on and were applicable only to relatively large, for-profit companies. For instance, he outlines "four principles of good strategy" as follows: set as your primary goal superior, long-term return on capital; set separate strategies for each of the business areas in which you complete; recognize that profit is driven by the industry of which your company is a part and the position your company occupies in that industry; and view your firm as a collection of activities.

I may or may not agree that these are the four principles of good strategy (I don't actually, but that's a whole other blog post) but regardless: he's clearly focused on "good strategy" only relative to large, for-profit, fairly complex organizations.

My point of view is that "being strategic" is much broader, simpler, and more useful than this. In fact, I define being strategic as: "consistently focusing on those core directional efforts that will best move you toward your desired outcomes."

This deceptively simple sentence implies a series of powerful mental disciplines. And learning to do them well provides a framework for thinking and effort that can serve you in any arena, and support you in creating the life, work, business or relationships you desire. In my experience, being strategic isn't a rarified, arcane capability only to be understood and made use of by highly-paid consultants and C-level executives of publicly held corporations: it's a valuable life-skill for anyone.

An analogy: when the Volkswagen was first created, it was envisioned as "the people's car"; a simple vehicle that was reliable and easy to operate; one that would serve the normal person's transportation needs at a reasonable price. Not everybody needs a Mercedes.

I guess I'm a proponent of "Volks-strategy": Strategy for everyone!

Comments

[Alan S. Michaels]

With all due respect...

There is nothing in Porter's comments that implies only for large complex companies.

Porter’s comments that companies should "set separate strategies for each of the business areas in which you complete" is a short-hand way of saying not to confuse corporate strategy (which includes deciding which businesses to compete in) and business unit strategy.

Small companies competing in only one industry can ignore that one statement.

Most companies, including small companies, actually compete in multiple businesses. Even a consultant who writes a strategy book competes in two industries.

In our analysis of most of the global 2,000 companies, they compete, on average, in approximately 75 businesses (industries). Each corporate business unit, no matter how big or how small, should have a strategy, and the activities of each business unit should be in concert with the corporate strategy.

In my opinion, Michael E. Porter is still the world’s chief business strategy methodology guru!

Cheers,
Alan S. Michaels
Co-founder www.eCompetitors.com

[Erika Andersen]

Alan -

Thanks for commenting - I love a discussion! However, I think you may have misunderstood my main point. (By the way, I agree that even small companies compete in a variety of industries.)

But we're going to have to agree to disagree about whether or not his advice is or isn't most appropriate for and targeted to large, publicly-held companies. I think yes, you think no. It would be interesting to see what Mr. Porter thinks.

My main point though, lines up with something you're saying: that Michael Porter IS the world's chief business strategy methodology guru. Exactly; he talks about "being strategic" as though the ideas and skills of being strategic are only applicable to business - not to an individual's career or life plan, or to the management of a non-profit organization, or finding a mate.

And I beg to differ.

[franke james]

I agree with you that being strategic is a valuable life-skill. I'm looking forward to your book -- I sense you will find a way to marry smart analytical thinking with creative thinking -- and thus use both sides of the brain. Here is my favorite 'strategy' book -- though it is more for businesses than individuals. The Blue Ocean Strategy by Chan Kim and Renee Mauborgne is a book that draws on both sides of the brain. The authors ask why businesses swim in the 'bloody red ocean of rivals fighting over a shrinking profit pool' when there are large uncontested blue oceans. Their six tools are about creating 'Blue Oceans' of uncontested market space through value innovations -- and they work. Some of the ideas are so simple (e.g. Look across industries for ideas you can apply in yours.) you can quickly see how and why some products rewrite the rules, and redefine entire industries.

[Erika Andersen]

Franke -

Thanks! Can't wait to send you a copy of the book...

You're the third person who's recommended Blue Ocean Strategy; I've got the message now. ;-) So I'll definitely read it!

Warmly,
Erika