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.

Recommend "Getting Things Done" as a good read for all managers

I just finished the book "Getting Things Done" by David Allen and recommend it for any manager who is constantly inundated with requests, needs, unfinished business, and "to do lists" at home and work.

This book provides a personal productivity system for organizing and completing all the ongoing activities in your life. Even if you don't apply the entire system that David Allen presents, there are enough good tips and tools to make it worth reading.

One of David's best suggestions is getting "open loops" out of your head and onto a written record. These are the things that you know you need to do but haven't completed, and all to often, haven't started. These often mentally nag at you and can easily lead to stress and feelings of being overwhelmed as they pile up. Having them out of your head provides immediate piece of mind because you can now see the list in its entirety and begin the task of prioritization and planning

As anyone familiar with Lean and Agile management, there is a lot of power in having visual tools that can be used for quick reference on the status of ongoing activities

A second very good recommendation is David's focus on "what's the next action". It almost a mantra from the book. For everything you need to do, you should decide "what is the next action". This must be a very specific next step to take. Once this next action is identified, you then decide whether to do it, delegate it, or defer it. Whether it's a home improvement task or an important business meeting, the best way to get things done is to be very clear on what the specific next step is in completing the activity. Don't leave the activity open ended. Rather make sure you know who is doing what and by when to keep the ball moving forward. Implementing these two key tips of 1) organizing what you need to do, and 2) deciding what the next action is to get it done is a simple, but often unused, tip to increasing your personal performance. 

David does a very good job in explaining his system which provides value whether you implement the entire productivity program or just a couple helpful tips. If you prefer audiobooks, the version read by David Allen himself is a very good listen.

Recommend On Time/On Budget as a good introduction to the basics of managing projects

I just finished reading On Time/On Budget: A Step-by-Step Guide to Managing Any Project by Sunny Baker and Kim Baker. This is a very good introduction for anyone new to project management. The book is not specific for any particular industry, but at the subtitle states, it is a primer to the general topic. Because this book has been around since 1992, you can likely pick it up pretty cheap. I got my copy for 3 dollars at a local used book store.

A nice trait of the book is its clarity and easy reading. The Project Management Body of Knowledge (PMBOK), sometimes referred to as the Project Management "bible", can be daunting for a newcomer to the field because of all the jargon, processes, and "how to manage everything" approach to project management. By contrast, On Time On Budget does a very good job of stripping away the jargon and complexity, and gives you an easy to read, easy to understand introduction to the basics of managing a business project. If your company doesn't have a lot of Project Management tools or templates for you to use, there are some nice templates at the back of the book that can help you plan, manage, and close out your projects.

Written in 1992, the last chapter on project management software is understandably a bit out of date. The rest of the book is pretty timeless, because no matter how much project management technology improves, the success of every past, present, and future project depends on people being able to manage project scope, schedule, and budget.