The Best CEOs are Teachers of Strategy


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 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?   


Republished with author's permission from original post.

Joel McCabe
Joel McCabe serves as a Senior Consultant at Sales Benchmark Index (SBI), a sales and marketing consultancy focused exclusively on helping B2B companies exceed their revenue targets.


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