Porter_image“The best CEOs I know are teachers, and at the core of what they teach is strategy.”

-Prof. Michael Porter, Harvard Business School

 

Professor Michael Porter is a leading authority on competitive strategy. He chairs Harvard Business School’s program dedicated to newly appointed CEOs of large corporations.

 

What’s interesting about his work is that he states most companies don’t have an actual strategy. They typically have tactics or steps masquerading as strategy. These are not the same thing. Your overall strategy is the direction you are heading as an organization. Tactics and steps are how you get there. They are the pieces that make up that strategy. Which are you implementing?

 

What can be said of your organization and your strategy? Better yet, what are the consequences of your strategy, or lack thereof?

 

To illustrate this point, I’ve provided the 2012 Q1 strategy highlights by former Yahoo! CEO, Scott Thompson.   

 

  1. Consolidate technology platforms and shutting down on transitioning roughly 50 properties that don’t contribute meaningfully to engagement of revenue.
  2. Define our core media connections and commerce businesses, including News, Finance, Sports, Entertainment, Mail and a handful of others.
  3. Move engineers into our commerce businesses to put them closer to our user and dedicating some of our best and brightest to meaningful innovation in those core businesses.
  4. Accelerate the deployment of the platforms and technologies we’ve built to make each of our properties more scalable, nimble and flexible, and therefore, less costly and time consuming to run.
  5. Make better use of Yahoo!’s vast data to personalize user experiences and dramatically improve advertiser ROI.
  6. Refocus our R&D on owned and operated properties and stopping development of a number of initiatives. 

     

Interesting tactics but they don’t speak of Yahoo!’s overarching strategy. Improving advertiser ROI is a great idea, but that isn’t a strategy. It’s clearly a tactic.  What is the mission/vision that drives the organization? Perhaps this speaks to some of the trouble Yahoo! has been having over the past few years.

 

If you’re interested to see how your strategy measures up, check out SBI’s Annual Research Report. It includes examples of how top CEOs and sales leaders execute on strategy.

 

Key Finding:  Only 22% of sales organizations have the right sales strategy.

 

One last thought on corporate strategy from Michael Porter. He mentions that too many companies focus on competition and being the best. In his opinion, and ours at SBI, this is an elusive game with negative ramifications. The most significant is that it potentially leaves the customer out of the picture.

 

It is better to focus on differentiation and what makes your firm unique. What customer needs do you uniquely serve?   

 

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ABOUT THE AUTHOR

Aaron Bartels

Helps clients solve the most difficult challenges standing in the way of making their number.
Learn more about Aaron Bartels >

He founded Sales Benchmark Index (SBI) with Greg Alexander and Mike Drapeau to help business to business (B2B) leaders make the number. The world’s most respected companies have put their trust in and hired SBI. SBI uses the benchmarking method to accelerate their rate of revenue growth. As an execution based firm, SBI drives field adoption and business results.

 

His clients describe him as a consultant who:

 

“Makes transformational impacts on me, my people and my business”

 

“Solves my most difficult problems that to date we have been unable to solve ourselves”

 

“Brings clarity to an environment of chaos”

 

“Has real world sales operations experience making him qualified to advise us on a variety of sales and marketing challenges”

 

“Is able to spot proven best practices that once implemented will make a material impact on my business”

 

“Constantly challenges status quo and compels us to act”

 

“Focuses on execution and driving change to stick in our environment”

 

“Makes good on his promises while enabling our business to realize his projected results”

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