Monthly Archives: February 2014

Have Michael E. Porter explain Competitive Strategy to you

While working on another piece for this blog, I came across this great video from a rather old series of Harvard Business School videos. Please find my comment below.

http://www.youtube.com/watch?v=c4ZBVp8-9gA

If you want to save lot of money for executive education on strategy, just have Prof. Porter explain the generic strategies, 5 forces and details of a low-cost strategy. A truly great lecture.

In summary, every company has to watch out for five forces that shape the profitability of every industry. Although the 5 forces are often criticized for not capturing change or government regulations, Porter mentions these factors in his review. He also brushes over what he calls the generic strategies. This is a 2×2 matrix of scope (narrow/broad) and advantage (differentiation/low-cost), which allows a positioning and survival of several competitors in the same industry. I know people insisting on “lowest cost” but Porter talks about this, too. The main idea is that one has to pick a strategy and then follow through.

The examples and interviews he uses to illustrate a low-cost strategy might be a bit outdated, but one gets the point.

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February 18, 2014 · 5:38 pm

BCG’s Yves Morieux on complexity and collaboration

This BCG partner has a great angle on competitiveness of large organizations. He claims that businesses do not really fight their competitors but rather their own complexity.

If I had to summarize the talk in one sentence it would be something like this: Because businesses wish to be productive and engage their employees, they use hard and soft approaches, which finally backfire and create complexity, thereby reducing productivity and engagement – Sounds reasonable. Out of the recommendations I find that the most important, but also most abstract, is the last one. “Reward those who cooperate and blame those who don’t cooperate”. This culture will determine whether people care, work together and perform . But how do we get there? Giving people power and therefore the freedom to make decisions (called autonomy in a different TED talk) seems to be a great starting point.

https://www.youtube.com/watch?v=gMzx2acLPIo

In his talk, Morieux states two modern enigmas he encountered: Productivity is disappointing in all the companies he worked for (despite all the technological advances) and there is little engagement of employees at work.

Ad-hoc solutions to these issues are always tackled with one of more of what Morieux calls ‘pillars’. You can use the hard way, creating/changing structure, processes, systems, or the soft way, by engaging feelings, sentiments, interpersonal relationships, traits, personality. In the end, both these two pillars, according to Morieux, are obsolete.

He claims that if an organization tries to cater to a new requirement, it will most likely add a layer of responsibilities and rules. This will add complexity, cost – without any real impact. A way out would be collaboration, but this barely happens. This is often compensated for by the individual effort of the employees, and results in disengagement of the employees.

The hard approach is unable to foster cooperation. It can only add new boxes, new bones in the skeleton.  – Yves Morieux

The way out is what Morieux calls the smart simplicity approach based on simple rules. These rules are:

  • Understand what others do. What is their real work? Go beyond the boxes, the job descriptions, beyond the surface of the container, to understand the real content.
  • Reinforce integrators. Integrators are managers, existing managers that you reinforce so that they have power and interest to make others cooperate. Remove layers!
  • Give people power! You must give more power to people so that they have the critical mass to take the risk to cooperate, to move out of insulation. Otherwise, they will withdraw.
  • Create feedback loops that expose people to the consequences of their actions.
  • Increase reciprocity, by removing the buffers that make us self-sufficient. When you remove these buffers, people will cooperate.
  • Reward those who cooperate and blame those who don’t cooperate. Blame is not for failure, it is for failing to help or ask for help.

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February 5, 2014 · 3:32 pm