Young Leaders exist at every level in a company, not just as CEOs.
Are you a young leader in your company? In a role where you need to give direction?
Steve Jobs said "your work is going to occupy a large part of your life and the only way to be truly satisfied is to do great quality work. And the only way to do great quality work is to enjoy what you do".
And click on links below to BUY THE BOOK NOW!!
Young Leaders at Every Level - Buy the ebook now for $7.99. Immediate Download.
The story of a young MBA Abhijit Joshi climbing the organizational ladder. Follow him as he discover's his passion, figures out the money equation and takes charge of his life and work. Eventually reaching the pinnacle of success winning the CEO of the Year award. Buy the eBook NOW for $5.99. Immediate download & Happy Reading..
Announcing the launch of our open program "Strategic Sales Management". Program runs over 12 weeks with six sessions, each four hour session happening every two weeks.
Last week, was at a b - to b sales intervention for a glass company. Key concern of the salespeople - how do we ensure a set of loyal and happy customers? What we have right now is a bunch of customers who negotiate every inch of the way for prices and if the price is not OK, then the order is shifted to someone else. Even though our product quality is good, but then so is the competition:
a. In a b to b situation, there are multiple decision makers in every company. While purchase and technical buyers are of course to be contacted all the time, how about talking to buying influences within the company from where the need emerges eg if you have a new design for a glass bottle, talk to the brand manager who handles perfumes and cosmetics. Understand his brand plan for the next year - how many products does he plan to launch this year, where are his products selling, what are the gaps in the product portfolio, etc?
b. Study the business challenges (pain areas) for the company: This could be - falling sales, poor brand image, delayed payments, low profits, attrition amongst key people etc. Link your solution to these problems. eg a consulting company used to sell training programs on the basis of skill improvement. The CEO used to be more worried however about retaining his star performers. The consulting company started connecting better with the Sales head and CEO when the the solution was demonstrated as a retention tool and not a skill improvement tool.
c. Convert product benefits to specific financial benefits for each customer in $$$. eg a auto paints company designed a new formula which had better flow ad viscosity parameters and tried to sell it technically. But the client said No to the 30% price increase. Things were stuck for about six months till the technical team linked the better product to financial benefits to the customer. The superior product would result in faster cleaning of the paint shop, leading to more machine uptime, leading to higher production of $5.2 million dollars, and profits of $1.1 mn. The company's sales team researched all this information and presented their findings to the senior leadership at the customer. They got a 22% price increase. They did a similar activity and created customized cost benefit calculations for their top five customers and got an average price increase of 24%.
d. Use social media to position your company well: If you are a packaging organization. Create a blog where you regularly post articles that talk about your technical ability - eg a new packaging solution that your company has designed, a success with a customer, etc. Connect with your customers on Linkedin. Post these articles on the blog and send a link to your customers. Do this once every ten days and over a period of time your customer forms an opinion about you.
What do you dread at work? Maybe it’s filling out expense reports. Making a cold call to a sales lead. Giving a long-delayed performance review to T.J. (aka “the Crier”). You dread it, you avoid it, you procrastinate. You check out Google News instead.
There’s a way out of this cycle, and it comes from self-help books. (We read them so you don’t have to.) Start by thinking about housecleaning, the most unpleasant part of our everyday existence, other than forwarded kitten emails. Here’s a surefire way to fight chore inertia. It’s called the 5-Minute Room Rescue, and it was proposed by the FlyLady, a “home executive” turned organization guru. You set a kitchen timer to five minutes. Then you rush to the dirtiest room in your house — the one you’d never let a guest see — and, as the timer ticks down, you start clearing a path. When the timer finally buzzes, you can stop with a clear conscience. Doesn’t sound so bad, does it?
The trick, of course, is that the dread is always worse than the thing that’s dreaded. So once you start cleaning house, you probably won’t stop at five minutes, especially when you see progress. You’ll get Big Mo on your side — or at least Big Mop — and an hour later, things will look great. By scaling down the goal — just five minutes! — you can overcome your own inertia.
In One Small Step Can Change Your Life, Dr. Robert Maurer of UCLA’s School of Medicine writes about his patient Julie, a divorced mother of two, who was 30 pounds overweight, depressed, and fatigued. He knew that the solution to her problems was exercise. He also knew that talking about thrice-weekly aerobics was likely to get him slapped. So he gave her a challenge: “How about if you just march in place in front of the television, each day, for one minute?”
That was the kick start she needed. One minute of low-intensity exercise did nothing to improve her health but everything to improve her attitude. When she came back for her next visit, she asked, “What else can I do with a minute a day?” Within a few months, as Dr. Maurer slowly stepped up Julie’s challenges, her resistance to a serious exercise program disappeared.
We’re all used to hearing about stretch goals, and when you feel empowered, stretch goals are useful ambition teasers. But when you feel overwhelmed, stretch goals are a recipe for paralysis. Michael Phelps needed a stretch goal. Julie needed a whisker goal, a target that was a hairsbreadth away from the status quo. We need these more modest steps because they help us get past the “startup costs” — the apprehension and fear — that deter us from doing the tasks we hate.
Ken Blanchard, author of the classic The One Minute Manager, knew that managers hated having to give feedback to employees. So he gave managers a whisker goal that he called “one-minute praisings.” He pointed out that most managers put off giving feedback until something goes very wrong, and then they swoop in with criticism. He called it “seagull management”: Managers fly in, make a lot of noise, dump on everyone, and then fly out. He challenged managers to give frequent, quickie assessments. Concentrate on catching your employees doing something right, he counseled, and then reinforce it with immediate, specific praise.
Whisker goals are particularly well suited to our current moment. Adversity taps our strength. When you’ve just laid off someone, it feels like too much to bear to offer constructive criticism to another employee. When you’ve given up your bonus and had your budget cut, it feels like too much to consider going back for that master’s degree. In hard times, we retrench. We maintain. We certainly don’t stretch.
But retrenchment is the wrong response to adversity. Adversity calls for change, and change doesn’t arrive via a miracle: It arrives via a kick start. During World War II, the government needed to orchestrate a massive increase in industrial production at the exact same time as its most talented industrial minds were being called away to fight. Government officials trained new people to look for tiny steps forward, not big leaps. A training manual advised workers to “look for hundreds of small things you can improve. Don’t try to plan a whole new department layout — or go after a big new installation of new equipment. There isn’t time for these major items. Look for improvements on existing jobs with your present equipment.”
Change can start with small measures, and it can be rewarded with small prizes. Maurer cites a Toyota employee-suggestion program. The carmaker receives 1.5 million employee suggestions every year, and it holds an annual awards ceremony to celebrate the single best idea. The lucky employee gets a fountain pen. (Lehman Brothers handed out million-dollar bonuses. How’d that work out?)
Dread and inertia are the enemy. But you have a powerful ally: the kitchen timer. Set it for five minutes and get to work clearing a path.
All of us are arrogant to some degree sometimes. I know I am. Some of us are better at fighting it than others. Some of us are better at hiding it. Some folks are lucky in that they just don’t struggle with it as much. But all of us have struggled with pride, ego, or arrogance at one point or another. And if you’re thinking to yourself that you never have, well, you just did.
I’m no Jeff Foxworthy, but you might be an arrogant leader if…
1. You’re always right.
2. They’re always wrong.
3. You just happen to be the smartest person in any room you’re in. (Weird coincidence, eh?)
Most weekends you will find me speeding down a trail on my mountain bike. Bring on the drop offs: I want to jump them; bring on the hops and bounces and falls. I consider myself someone who can handle the things that life throws my way. But there is one thing that raises my anxiety levels into the red zone: email.
One day while driving home, I thought: "Why don’t I just stop using email altogether?" That night while drifting off to sleep I imagined my email-free life. I liked the picture. Within the same week, I made the decision to cut email out of my life.
1.Track Your Current Productivity Levels
In order to start this experiment, I needed to track the difference in my productivity levels with and without email. I started my no email journey by installingRescueTime, a tool that tracks your workday activities and calculates a productivity score for you. The system is fully customizable. It took me a few hours to input the online sites and tools that make up my working day. I also inputted all the sites and places that I would deem as distractions. From there I ranked each item on a distraction scale from -2 to +2. I worked in my normal way for one week so that I was able to benchmark, after I implemented changes. My productivity score at the end of the normal week with email was 23 percent.
2. Notify People
I started letting people know about my decision and thought it would be the easiest part of the process. It proved to be the hardest. I put a note on Facebook, LinkedIn and Twitter to announce my decision. I put an auto-responder on my email which read as follows:
Subject: No More Email
Body: As many of you know, I am on a mission this year to reduce email with the aim of completely removing it out of my life.
My reason for wanting to do this:
I believe it is a time waster.
I believe it sucks people dry of valuable time that could be spent productively working on things they love.
I believe that it is a duplication of all the systems we already use.
It basically serves as a notification system to convey information we already know.
So, please do connect with me in the following places:
Twitter
Facebook
LinkedIn
Thanks for helping and if you feel so inclined, I would love for you to join me on this mission of simplifying my space and time.
Kindly, Claire
The reaction to my decision was interesting: a few people even decided to join me. Others told me that I was mad. And still others had full-on debates with me via Facebook as to all the reasons why moving from email to other mediums made no sense whatsoever. The most interesting response came from my clients: they were genuinely relieved. My decision meant less email for them to deal with, no matter how small that daily number was in the larger pool of emails they were rummaging through. I felt encouraged. I knew I was on to something.
The most interesting response came from my clients: they were genuinely relieved.
3. Move Clients to Project Management Systems
After notifying my clients of my decision, I also explained to them that all work would be moving into a collaborative space. I set up accounts with Huddle,TeamworkPM, Basecamp and Asana. I would’ve preferred to only set up one tool but each of these platforms offer something unique that my respective clients needed. In order to not cause too much disruption, I decided I needed to meet the client where they were on tools they already used. The primary goal of these systems was to reduce the email deluge, and they did, because email notifications from the system can be controlled. I also trained my clients to classify their communications as follows:
Day to day discussions that do not need to be retained for future reference
Important information that needs to be referenced over and again by team members
Information that needs to to move to a task list because it requires specific action
Each of the project tools addresses these three types of communication very well. The message sections are suitable for day-to-day discussions. Important information that the team needs to refer back to over and over should always be documented in whiteboards and notebooks which are easily accessible, and any information that relates to tasks should always be managed in the task section of the project tools.
With the exception of one client based in South Africa, a country which still struggles with broadband speed, every single client made the transition with ease and all of them have subsequently implemented the same tools into their own businesses.
All the project tools allow for document sharing and Huddle also allows for online editing which means that documents do not need to be downloaded and uploaded all the time.
The Results: Benefits and a Changing Work Day
The transition was far easier than I expected and what surprised me most was how relieved clients were to make the change with me. The greatest benefits that I have found include:
I have reclaimed on average three hours of every working day.
I am able to get home and switch off. I cook, exercise and read at night which I love doing and I do all these things guilt free.
I no longer start the day with email. Instead, I open the project tool belonging to the client who I will be giving my attention to for that day,
I no longer experience the compulsive need to empty out my inbox all the time.
I handle less than 10 emails per day.
At the end of every day, I write down my task list for the following day. After this, I open my email and clear it out using the file, action, delete principle. This never takes more than 20 minutes.
I no longer have to waste time searching for attachments and information within emails because it is all contained within the files and whiteboard or notebook sections of the project tools.
I no longer have file sharing problems because the files are accessible anytime, anywhere. With TeamworkPM, I also have Dropbox integrated which means that file sharing is even more simplified.
I no longer have lengthly team meetings via Skype or in person. I have educated my clients to start the week off with a Monday morning check-in where one strategic issue is discussed and all team members give a quick breakdown of what they will be doing for the coming week.
Meetings, when they do happen, are now happening in a collaborative space and I have noticed that people have become more accountable.
Managing overall performance is easier for me because with a very quick glance the entire team’s performance can be seen. This makes identifying bottlenecks much easier.
I no longer need to email and request progress reports from individual people. The system shows me where people need help due to slipping deadlines or where some employees do not have enough work.
Because full teams are collaborating in one space, I have found that cross pollination of ideas and understanding of different work streams has increased because people are exposed to what other team members are doing.
I no longer multitask as I did before. I open one project tool at a time and give that client my full attention before moving to the next.
People who work with me have a realistic time frame in mind when they can expect communication back from me because I have communicated to them what days of the week belong to them and their project.
My productivity score has gone from 23 percent when I was using email as my primary communication tool, to 68 percent over a period of 10 months.
Exceptions to My "No Email" Strategy
Some people are not fazed by an inbox with 16,000 emails in it so this type of project might be a bigger anxiety that your inbox. Also, for people who do not deal with large volumes of email, my system will also not be as applicable.
Of course my email accounts are still in use for verification purposes when I am signing up to online tools and software. I also receive receipts from online purchases via email and my website does have my email address for first time clients. Rather than cut it out completely, it would be fair to say that I have found a way to tame, reduce, and manage it - and I plan on continuing working this way for the foreseeable future. It’s been a very worthwhile journey.
--
How about you?
Is email volume and management an issue to you? What measures have you put in place to ease the pain?
Here is proof of what happens when we follow jargon for the sake of "jargon" without understanding its relevance......
What killed the Monitor Group, the consulting firm co-founded by the legendary business guru, Michael Porter? In November 2012, Monitor was unable to pay its bills and was forced to file for bankruptcy protection. Why didn’t the highly paid consultants of Monitor use Porter’s famous five-force analysis to save themselves?
What went wrong?
Was Monitor’s demise something that happened unexpectedly like a bolt from the blue? Well, not exactly. The death spiral has been going on for some time. In 2008, Monitor’s consulting work slowed dramatically during the financial crisis. In 2009, the firm’s partners had to advance $4.5 million to the company and pass on $20 million in bonuses. Then Monitor borrowed a further $51 million from private equity firm, Caltius Capital Management. Beginning in September 2012, the company was unable to pay monthly rent on its Cambridge, Mass., headquarters. In November 2012, Monitor also missed an interest payment to Caltius, putting the notes in default and driving the firm into bankruptcy.
Was it negligence, like the cobbler who forgot to repair his own children’s shoes? Had Monitor tried to implement Porter’s strategy and executed it poorly? Or had Monitor implemented Porter’s strategy well but the strategy didn’t work? If not, why not?
Was it missteps, such as chasing consulting revenue from the likes of the Gaddafi regime in Libya? Or had the world changed and Monitor didn’t adjust? Or was it, as others suggested, that Monitor had priced itself out of the market? Or was Monitor’s bankruptcy, as some apologists claimed, merely a clever way of selling its assets to Deloitte?
A very strange tale
The answers to these intriguing questions are strange and troubling. We can find some of them in the work of consulting insider, Matthew Stewart, and his enlightening, but misleadingly-titled, book,The Management Myth (Norton, 2009).
In his book, Stewart tells how in 1969, when Michael Porter graduated from Harvard BusinessSchool and went across the river to get a PhD in Harvard’s Department of Economics, he learned that excess profits were real and persistent in some companies and industries, because of barriers to competition. To the public-spirited economists, the excess profits of these comfortable low-competition situations were a problem to be solved.
Porter saw that what was a problem for the economists was, from a certain business perspective, a solution to be enthusiastically pursued. It was even a silver bullet. An El Dorado of unending above-average profits? That was exactly what executives were looking for—a veritable shortcut to fat city!
Why go through the hassle of actually designing and making better products and services, and offering steadily more value to customers and society, when the firm could simply position its business so that structural barriers ensured endless above-average profits?
Why not call this trick “the discipline of strategy”? Why not announce that a company occupying a position within a sector that is well protected by structural barriers would have a “sustainable competitive advantage”?
Why not proclaim that finding these El Dorados of unending excess profits would follow, as day follows night, by having highly paid strategy analysts doing large amounts of rigorous analysis? Which CEO would not want to know how to reliably generate endless excess profits? Why not set up consulting a firm that could satisfy that want?
The Aristotle of business metaphysics
Thus it was that in March/April 1979, Michael Porter published his findings in Harvard Business Review in an article entitled “How Competitive Forces Shape Strategy” and followed it up the next year with a long and unreadable book. The writings started a revolution in the strategy field. Michael Porter became to the new discipline of strategy “what Aristotle was to metaphysics”.
Better still, the new-born discipline of strategy was able to present itself as “the discipline that synthesizes all of the other functional sub-disciplines of management into a meaningful whole. It defines the purpose of management and of management education.”
In 1983, Porter co-founded his consulting company, the Monitor Group, that over the years generated hundreds of millions of dollars in fees from corporate clients (as well as from clients in the nonprofit sector), and also providing rich livelihoods for other large consulting firms, like McKinsey, Bain and BCG.
“Among academics,” writes Joan Magretta in Understanding Michael Porter, “he is the most cited scholar in economics and business. At the same time, his ideas are the most widely used in practice by business and government leaders around the world. His frameworks have become the foundation of the strategy field.”
No basis in fact or logic
There was just one snag. What was the intellectual basis of this now vast enterprise of locating sustainable competitive advantage? As Stewart notes, it was “lacking any foundation in fact or logic.” Except where generated by government regulation, sustainable competitive advantage simply doesn’t exist.
Porter might have pursued sustainable business models. Or he might have pursued ways to achieve above-average profits. But sustainable above-average profits that can be deduced from the structure of the sector? Here we are in the realm of unicorns and phlogiston. Ironically, like the search for the Holy Grail, the fact that the goal is so mysterious and elusive ironically drove executives onward to continue the quest.
Hype, spin, impenetrable prose and abstruse mathematics, along with talk of “rigorous analysis”, “tough-minded decisions” and “hard choices” all combined to hide the fact that there was no evidence that sustainable competitive advantage could be created in advance by studying the structure of an industry.
Although Porter’s conceptual framework could help explain excess profits in retrospect, it was almost useless in predicting them in prospect. As Stewart points out, “The strategists’ theories are 100 percent accurate in hindsight. Yet, when casting their theories into the future, the strategists as a group perform abysmally. Although Porter himself wisely avoids forecasting, those who wish to avail themselves of his framework do not have the luxury of doing so. The point is not that the strategists lack clairvoyance; it’s that their theories aren’t really theories— they are ‘just-so’ stories whose only real contribution is to make sense of the past, not to predict the future.”
The goal of strategy is to avoid competition?
How did all this happen? Porter began his publishing career in his March-April 1979 Harvard Business Review article, “How Competitive Forces Shape Strategy”, with a very strange sentence: “The essence of strategy is coping with competition.” Ignoring Peter Drucker’s foundational insight of 1973 that the only valid purpose of a business is to create a customer, Porter focused strategy on how to protect businesses from other business rivals. The goal of strategy, business and business education was to find a safe haven for businesses from the destructive forces of competition.
By defining strategy as a matter of defeating the competition, Porter envisaged business as a zero-sum game. As he says in his 1979 HBR article, “The state of competition in an industry depends on five basic forces… The collective strength of these forces determines the ultimate profit potential of an industry.” For Porter, the ultimate profit potential of an industry is a finite fixed amount: the only question is who is going to get which share of it.
Sound business is however unlike warfare or sports in that one company’s success does not require its rivals to fail. Unlike competition in sports, every company can choose to invent its own game. As Joan Magretta points out, a better analogy than war or sports is the performing arts. There can be many good singers or actors—each outstanding and successful in a distinctive way. Each finds and creates an audience. The more good performers there are, the more audiences grow and the arts flourish.
What’s gone wrong here was Porter’s initial thought. The purpose of strategy—or business or business education—is not about coping with competition–i.e. a contest in which a winner is selected from among rivals. The purpose of business is to add value for customers and ultimately society. There is a straight line from this conceptual error at the outset of Porter’s writing to the debacle of Monitor’s bankruptcy. Monitor failed to add value to customers. Eventually customers realized this and stopped paying Monitor for its services. Ergo Monitor went bankrupt.
Making profits without deserving them
In the theoretical landscape that Porter invented, all strategy worthy of the name involves avoiding competition and seeking out above-average profits protected by structural barriers. Strategy is all about figuring out how to secure excess profits without having to make a better product or deliver a better service.
It is a way of making more money than the merits of the product or service would suggest, or what those plain folks uncharitable to the ways of 20th Century business might see as something akin to cheating. However for several decades, many companies were ready to set aside ethical or social concerns and pay large consulting fees trying to find the safe and highly profitable havens that Porter’s theory promised.
Although Michael Porter, the human being, appears to be a well-meaning man of high personal integrity, his framework for the discipline of strategy isn’t just an epistemological black hole; in its essence, it’s antisocial, because it preserves excess profits, and it’s bad for business, because it doesn’t work. It accomplishes the unlikely feat of goading business leaders to do wrong both to their shareholders and to their fellow human beings.
It is only recently that Porter’s writing has begun to include any awareness that creating safe havens for businesses with unending above average profits protected by structural barriers is not good for customers and society, with his advocacy of shared value. This recognition has come, however, without yet jettisoning any of the toxic baggage of sustainable competitive advantage.
No competitive advantage is sustainable
The disastrous consequences of thinking that the purpose of strategy, business and business education is to defeat one’s business rivals rather than add value to customers has of course been aggravated by the epic shift in the power of marketplace from the seller to the buyer. In the studies of the oligopolistic firms of the 1950s on which Porter founded his theory, it appeared that structural barriers to competition were widespread, impermeable and more or less permanent.
Over the following half century, the winds of globalization and the Internet blew away most of these barriers, leaving the customers in charge of the marketplace. Except for a few areas, like health and defense where government regulation offers some protection, there are no longer any safe havens for business. National barriers collapsed. Knowledge became a commodity. New technology fueled spectacular innovation. Entry into existing markets was alarmingly easy. New products and new entrants abruptly redefined industries.
The “profit potential of an industry” turned out to be, not a fixed quantity with the only question of determining who would get which share, but rather a highly elastic concept, expanding dramatically at one moment or collapsing abruptly at another, with competitors and innovations coming out of nowhere. As Clayton Christensen demonstrated in industry after industry, disruptive innovation destroyed company after company that believed in its own sustainable competitive advantage.
The only safe place
The business reality of today is that the only safe place against the raging innovation is to join it. Instead of seeing business—and strategy and business education—as a matter of figuring out how to defeat one’s known rivals and protect oneself against competition through structural barriers, if a business is to survive, it must aim to add value to customers through continuous innovation and finding new ways of delighting its customers. Experimentation and innovation become an integral part of everything the organization does.
Firms like Apple [AAPL], Amazon [AMZN], Salesforce [CRM], Costco [COST], Whole Foods [WFM] and Zara [BMAD:ITX] are examples of prominent firms pursuing this approach. They have shifted the concept of the bottom line and the very purpose of the firm so that the whole organization focuses on delivering steadily more value to customers through innovation. Thus experimentation and innovation become an integral part of everything the company does. Companies with this mental model have shown a consistent ability to innovate and to disrupt their own businesses with innovation.
Thus what is striking about continuous innovation is that the approach is not only more innovative: it tends to make more money. The latter point is important to keep in mind. For all the hype about innovation, unless it ends up making more money for the firm, ultimately it isn’t likely to flourish. Making money isn’t the goal, but the result has to be there for sustainability.
Is continuous innovation sustainable? Firms like those I mentioned have been at it for one or more decades with extraordinary results. What’s interesting is that they are consistently disrupting others, rather than being disrupted themselves. Will they survive for 50 or 100 years? Time will tell. What we do see is that they are doing a lot better than firms pursuing shareholder value or focusing merely on defeating rivals.
Monitor had no place in the emerging world
In this world, Monitor’s value proposition of a supposed sustainable competitive advantage achieved by studying the numbers and the existing structure of the industry became increasingly implausible and irrelevant. Its consultants were not people with deep experience in understanding what customers might want or what is involved in actually making things or delivering services in particular industries or how to innovate and create new value.
They were part-time academics who promised to find business solutions just from studying the numbers. They had no idea how to build cars or make mobile phones or generate great software. They were numbers men looking for financial solutions to problems that required real-world answers.
The important question is not: why did Monitor go bankrupt? Rather, it is: how were they able to keep going with such an illusory product for so long? The answer is that Porter’s claim of sustainable competitive advantage, based on industry structure and the numbers, had massive psychological attractions for top management.
The strategist CEO as a kind of warrior god
Porter’s theory thus played to the image of the CEO as a kind of superior being. As Stewart notes, “For all the strategy pioneers, strategy achieves its most perfect embodiment in the person at the top of management: the CEO. Embedded in strategic planning are the assumptions, first, that strategy is a decision-making sport involving the selection of markets and products; second, that the decisions are responsible for all of the value creation of a firm (or at least the “excess profits,” in Porter’s model); and, third, that the decider is the CEO. Strategy, says Porter, speaking for all the strategists, is thus ‘the ultimate act of choice.’ ‘The chief strategist of an organization has to be the leader— the CEO.”
Strategy leads to “the division of the world of management into two classes: “top management” and “middle management.” Top management takes responsibility for deciding on the mix of businesses a corporation ought to pursue and for judging the performance of business unit managers. Middle management is merely responsible for the execution of activities within specific lines of business.
The concept of strategy as it emerges defines the function of top management and distinguishes it from that of its social inferiors. That which is done at the top of an organizational structure is strategic management. Everything else is the menial task of operational management.
Two classes of management
Practitioners of strategy insist on this distinction between strategic management and lower-order operational management. Strategic (i.e. top) management is a complex, reflective, and cerebral activity that involves interpreting multidimensional matrices. Operational management, by contrast, requires merely the mechanical replication of market practices in order to match market returns. It is a form of action, suitable for capable but perhaps less intelligent types.
This picture of CEO-superdeciders helps justify their huge compensation and the congratulatory press coverage, and yet again, it also has little foundation in fact or logic. The strategy business thus lasted so long in part because it supports and advances the pretensions of the C-suite.
Porter’s strategy theory is to CEOs what ancient religions were to tribal chieftains. The ceremonies are ultimately about the divine right of the rulers to rule—a kind of covert form of political theory. Stewart cites Brian Quinn that it is “like a ritual rain dance. It has no effect on the weather that follows, but those who engage in it think that it does.”
The future of strategy consulting
Does strategy consulting have a future? When rightly conceived as the art of thinking through how companies can add value to customers–and ultimately society–through continuous innovation, strategy consulting has a bright future. The market is vast because most large firms are still 20th Century hierarchical bureaucracies that are focused on “the dumbest idea in the world”: shareholder value. They are very weak at innovation.
Consultancies that can guide large firms to move into the world of continuous innovation in the 21st Century have a bright future. To succeed in this field, however, consultants need to know something both about innovation and about the sectors in which they operate and the customers who populate them. Merely rejiggering the financials or flattering the CEO as the master strategist is not going to get the job done. Managers and consultants are going to have to get their hands dirty understanding what happens on the front lines where work gets done and where customers experience the firm’s products and services. To prosper, everyone has to become both more creative and more down-to-earth.
What has no future is strategy conceived as defeating rivals by finding a sustainable comparative advantage simply through studying the structure of the industry and juggling the numbers.
Since Monitor had no other arrow in its strategy quiver, it was doomed from the outset. Its embarrassing debacle marked the beginning of the end of the era of business metaphysics and the exposure of the most over-valued idea on the planet: sustainable competitive advantage.
Monitor was killed by the dominant force: the customer
Eventually even attractive illusions come to an end: people see through them. Ceremonial rain dances come to be viewed for what they are. The financial crisis of 2008 was a wake-up call that reminded even entrenched firms how vulnerable they were. Today, large firms have little interest in paying large fees to strategists to find sustainable competitive advantage just from studying the numbers.
Monitor eventually learned the hardest lesson of all: strategy, business and business education are not about pursuing the chimera of sustainable competitive advantage.
Monitor wasn’t killed by any of the five forces of competitive rivalry. Ultimately what killed Monitor was the fact that its customers were no longer willing to buy what Monitor was selling. Monitor was crushed by the single dominant force in today’s marketplace: the customer.
