Recently, I attended a University of North Carolina lecture by Michael Porter, Harvard Business School professor, who has made many foundational contributions to the field of strategy. You can download the slides from the presentation.
Some thoughts from the lecture that continue to apply in today’s landscape:
- The worst error in strategy is to compete with rivals on the same dimensions — be unique.
- The fundamental goal of a company is superior long-term return on investment (ROIC)
- Setting unrealistic profitability or growth targets can undermine strategy
Five tests of a “real” strategy:
- A unique value proposition compared to other organizations
- A different, tailored value chain
- Clear tradeoffs, and choosing what not to do
- Activities in the value chain that fit together and reinforce each other
- Strategic continuity with continual improvement in realization
The Bottom Line:
Porter made great points and for many in the audience it was a refresher on strategy 101. The main message at the very end of the lecture was strategy is very hard to develop, but execution is even harder. In organizations today, there are so many agendas largely driven by the dynamics of humans (a concept I reference as lust, fear and greed). As companies develop strategy to get through this hard time, please keep in mind the realities of execution to have a greater likelihood of success.