Understanding Michael Porter

I recently read a very good book on corporate strategy and industry competition.  Joan Magretta's book, Understanding Michael Porter: The Essential Guide to Competition and Strategy is an excellent overview of the famous Harvard professor's views, research, and writings on corporate strategy and understanding why some companies and industries are more profitable than others.

Beyond explaining Porter's 5 Forces and the Value Chain, the author does a very good job of describing 5 tests for a good corporate strategy.

Unique Value Proposition:
The first test is that the strategy should focus on "competing to be unique" rather than "competing to be the best".  The later strategy, as Porter would claim, is not a strategy but simply a self-defeating competition of matching your competitors in a face-to-face battle that ultimately ends up in competing on price and a downward spiral into becoming a commodity.  The best strategies find a way to differentiate themselves from their competition such as targeting a different customer segment, fulfilling a different need, or fulfilling the need in a unique way.

Tailored Value Chain:
The second test of good strategy is that it has more than one "competitive advantage" and actually consists of an integrated set of activities along the value chain that are all consistent with each other and with the strategy.  The value chain activities include how the company does its procurement, product development, marketing, sales, supply chain, and service.

Fit:
The fit test of strategy is ensuring that the set of strategic activities are not only aligned with each other, but preferably self-reinforcing.

Trade-offs:
This may be the least intuitive test, but as Porter says, a good strategy makes clear "what you will not do".  Good strategic activities create trade-offs that make it clear which actions and decisions are not consistent with the strategy.  Having such clear trade-offs makes it easier for management and employees to make decisions on what they should and should not be doing.

Continuity:
Good strategy takes time to develop and cannot be created in its entirety from scratch.  Therefore, consistency and continuity over time is essential to keeping on the path set out by the strategy and allowing the interconnected activities to reinforce each other.

This is obviously a simplification of the ideas laid out in the book, which also goes into much more breadth as well as depth.  Definitely a good read for anyone interested in business strategy.

WARNING:  I listened to the audiobook which has a very annoying narrator, as you'll see from other reviewer comments, as well.  He has a very distracting habit of inflecting the pitch of his voice upward at the end of each sentence.  It took me a while to block it out and just listen to the content.  For me, I prefer audiobooks to text so that I can listen during my car commute so it was worth the pain, but if you're on the fence about text versus audiobook, you may want to choose the text.

"Building a Business" is a very good series of podcast seminars for entrepreneurs

I recommend the podcast series "Building a Business" for anyone interested in entrepreneurship and starting their own business. This is true regardless of what industry you're in and is definitely appropriate for someone interested in starting a biotech/med device company. This podcast series is freely available from iTunesU and is a set of recordings of entrepreneurship lectures from Oxford University.

The series provides 9 very nice overviews on key topic areas, including:
Writing a business plan
Intellectual property
Negotiation skills
Venture Capital deals

Each seminar has a different presenter, so they do vary in quality and clarity. Overall, they are all a good listen and very informative. I particularly enjoyed the podcasts entitled "Taking the First Steps", "Intellectual Property", "Negotiation Skills", and "Entrepreneurship and the Ideal Business Plan".

5 Best Podcasts for Business Managers

I have been attending a lot of management seminars lately for business development. The current trend seems to be less business development talks and discussions and a lot of job seeking advice and counseling. In this economic downturn, lots of people are out of work and looking for advice on how to get their next job.

I highly recommend polishing your interview and management skills to make sure that when that next job opportunity arises, you'll be ready for that elevator pitch, job interview, and next new job.

I strongly recommend listening to the many free podcasts that are available for business managers. My top 5 podcasts for business managers are listed below. They can all be downloaded from iTunes for free. If you don't have an MP3 player or iPOD, you can still listen to these by going directly to their websites.

1. ManagerTools Mike and Mark have been providing outstanding advice for several years now. They cover everything from how to give a strong handshake, how to run meetings, how to interview people and prepare for being interviewed, and how to manage people. This is a terrific podcast series and has won podcasts awards for the best business podcast.

2. The Cranky Middle Manager Wayne Turmel provides terrific interviews with management and business experts, authors, and gurus. He always provides terrific content mixed with his own humor and history lesson. Great show.

3. Project Management Podcast Cornelius Fichtner provides interviews, tips, and tools for project managers. Whether you’re a beginning project manager studying for the PMP exam or an experienced manager looking to extend your project management knowledge, this podcast provides a lot of valuable information.

4. PMLessonsLearned Henry Will set up this series of podcasts for project managers. They are divided into 3 types of podcasts each month: (i) project management education, (ii) PMP exam preparation, and (iii) project management job search podcasts.

5. StartupBizCast If you own or work for a small start up company, this podcast provides lots of excellent advice. It has a particular focus on small business marketing, with lots of good advice that any business manager can use.

Once you've listened to these (which can take a long time given the thousands of free podcasts available from these 5 alone) and you're ready for more: I recommend Negotiation Tip of the Week, The Public Speaker Quick and DIrty Tips, and Ethan Becker Speech Coach for more great tips to prepare you for getting and keeping your next job.

Good luck with your job searches. Let me know what websites, podcasts, books, and other tools you recommend.