Make Time for Strategy - Michael Porter's Big Ideas

Make Time for Strategy - Michael Porter's Big Ideas

The world's most famous business-school professor is fed up with CEOs who claim that the world changes too fast for their companies to have a long-term strategy. If you want to make a difference as a leader, you've got to make time for strategy.

Read his interesting and useful interview at Fast Company (2001 February).

Some of the ideas I wish to take away with me, from the interview:

1. There's a fundamental distinction between strategy and operational effectiveness. Strategy is about making choices, trade-offs; it's about deliberately choosing to be different. Operational effectiveness is about what's good for everybody and about what every business should be doing.

2. Whether you're on the Net or not, your profitability is still determined by the structure of your industry. If there are no barriers to entry, if customers have all the power, and if rivalry is based on price, then the Net doesn't matter -- you won't be very profitable.

3. Southwest Airlines has focused on a strategy of serving price-minded customers who want to go from place to place on relatively short, frequently offered flights without much service. That has stayed consistent over the years. But Southwest has been extremely aggressive about assimilating every new idea possible to deliver on that strategy.

4. A couple of years ago we would have read that the Internet was an incredibly disruptive technology, that industry after industry was going to be transformed. Well, guess what? It's not an incredibly disruptive technology for all parts of the value chain. In many cases, Internet technology is actually complementary to traditional technologies.

5. Most successful companies get two or three or four of the pieces right at the start, and then they elucidate their strategy over time. It's the kernel of things that is essential, that's the antidote to complexity.

6. Strategy used to be thought of as some mystical vision that only the people at the top understood. But that violated the most fundamental purpose of a strategy, which is to inform each of the many thousands of things that get done in an organization every day, and to make sure that those things are all aligned in the same basic direction....The best CEOs are teachers, and at the core they teach strategy, by going out to employees, to suppliers, and to customers, and repeating, "This is what we stand for, this is what we stand for."

Great reading...read the full interview from here @ Fast Company