I was recently going through some old files and realised that in some cases the more things change, the more they really stay the same. This is especially true in strategy and when you distil the writings of Michael Porter, a global authority on competition and strategy, there are essentially 10 key strategic insights. Not least among them is that most companies think they have strategy when they don’t.
Porter’s essential strategic insights are:
1. The granddaddy of all mistakes is competing to be the best, going down the same path as everybody else and thinking that somehow you can achieve better results.
2. Confusing marketing with strategy.
3. Overestimating strengths.
4. Getting the definition of the business wrong or getting the geographic scope wrong.
5. The Worst mistake: Not Having a Strategy at all.
6. Not addressing the hidden biases embedded in internal systems, organizational structures and decision-making processes.
7. Companies undermine their own strategies.
8. Strategy killers in the external environment.
9. If you listen to every customer and do what they want you to do, you can’t have a strategy.
10. Single minded pursuit of shareholder value, measured over the short term, has been enormously destructive for strategy and value creation.
Yes, some of these seem self-evident when you think about it, yet they run counter to the way most executives think and behave.
Clearly developing an effective strategy is a long-term process and not a short-term one, and having a strategy is even more important in these turbulent and uncertain times.
Remember we operate today in a VUCA World (Volatile, Uncertain, Complex, Ambiguous). There is nothing wrong in returning to basics – sometimes it’s important to step back and take an outsiders view of your business.
Need to see with a fresh set of eyes? Looking for someone to challenge your thinking? – Give me a call on 0403 346 322 or contact us via our website.