You’re going to compare your ideas with how to align strategy and project management with Harvard professor, Michael Porter.
Brainstorming on how to align strategy
Before watching the one hour long video with Michael Porter on how to align strategy and project management, think about your answers to the following questions:
Which company among your competitors is the best? (0-12.00 minutes)
Porter says the job of the strategist is to figure out how to provide the customer value better and uniquely well, that strategy is essentially about competing to be unique Do you agree with this? (0-12.00 minutes)
What are three common mistakes when it comes to thinking about strategy? (12.00 minutes)
What’s the difference between business strategy and corporate strategy? (15:00) :
What are the two main aspects of business strategy? (17.00)
What are the five forces that act on an industry? (21.00)
What’s the typical fundamental purpose of positioning a product/ service and what is the typical choice a business needs to make? (30:00)
How can the value chain be made to create a competitive advantage? (33:00)
How is strategy different from best practices? (36.30)
What three factors help create unique positioning? How do they relate to IKEA, for example? (42:30)
What are some tests that can show if your company is focusing well on aligning strategy and project management? (59:00)
How important is it to be consistent, robust and creative in your decisions when carving out the market space that you want to dominate?
Michael Porter on how to align strategy with project management:
Below are the same questions, but with some more questions discussing detail from the speech:
Which company among your competitors is the best?
(0-12.00) Porter says the job of the strategist is to figure out how to provide the customer value better and uniquely well, that strategy is essentially about competing to be unique Do you agree with this?
Where does your company ultimately end up relative to your competitors in terms of meeting the customers’ needs?
(12.00) What are three common mistakes when it comes to thinking about strategy:
confuse the strategy with the goal: the set of choices you will make that will produce the competitive advantage that will enable you to reach your goal
stategy is not about single actions, it is holistic. “e.g. my strategy is to internationalize”, but this is an action, not how the company is going to position itself to gain a sustainable competitive advantange. The actions flow out of the strategy.
Strategy is a lot more than a mission statement. IT’s a set of choices that organisation is making in order to compete.
(15:00) : What’s the difference between business strategy and corporate strategy
If you’re in a diversified company, you need a strategy for each different business (= business strategy), while at the same time having an over-arching strategy that brings the individual strategies together in a way that adds value (= corporate strategy) . How can portfolio businesses leverage each others’ advantages to amplify the value that the would create alone?
(17.00) What are the two main aspects of business strategy
Does you company outperform its rivals in the same industry? Is it underperforming?
1 – the business itself = industry structure – e.g. if you compete in passenger cars you’re in the passenger car industry
What’s the nature of the industry?
How\s it changing?
Is it getting better or worse?
2 – positioning : how you decided to compete within the industry, how we can get a competitive advantage.
(21.00) What are the five forces that act on an industry?
How well can your employees / team analyse their industry according to Porter’s five forces
a – rivalry (google VS yahoo)
b – clout that customers have to drive down the price
c – the bargaining power of the suppliers
d – new companies taking market share and driving down profitablity – barriers to entry
e – substitutes (plastic – steel)
(30:00) What’s the typical fundamental purpose of positioning a product/ service and what is the typical choice a business needs to make?
Acccording to Porter, most of the time you need to make a choice between positioning yourself as having a superiour product / service with unique value, or being a cost leader with a good enough product or service. Which describes your positioning better?
“the fundamental purpose of positioning is to get superior performance”
two ways to increase profitability
– superior product: you are a differentiator / unique value – performance – services
– inherently more efficient : you are a cost leader with good enough product / service
(33:00) How can the value chain be made to create a competitive advantage?
Has your company developed distinctive features that competitors don’t have in any part of the value chain?
Do you agree that companies that draw an advantage from different parts of the value chain are difficult to imitate?
How well can your employees trace competitive advantage of your products / services to the value chain?
(36.30) How is strategy different from best practices?
How do we get competitive advantage in price or cost?
How effective are your managers at validating then doing new best practices?
According to Porter, strategy is about doing something that’s different from best practice
(42:30) What three factors help create unique positioning? How do they relate to IKEA, for example?
According to Porter, the first thing we need for a successful strategy is a unique value proposition. What’s your answer to the 3 questions he recommends to ascertain this:
a – what customers are you serving?
b – what specific customer needs are we trying to meet?
c – How does that translate into the relative price we ask?
How do you think IKEA answered these three questions when formulating their strategy?
The second thing is to configure the value chain in a way the customer’s can’t to realize the proposition. What was it in IKEA’s strategy that allowed them to do this?
The third key concept in strategy is the concept of trade-offs. In order to be good at delivering some types of value, you have to be good at choosing not to deliver other types of value. How good are your technical specialists / managers at making trade-offs?
How willing are technical or engineering staff in your company willing to make tradeoffs?
What are some tests that can show if your company is focusing well on aligning strategy and project management?
How many of your employees have a clearer insight on how to understand the strategy in which what they’re doing is embedded, and, as a result, can enhance the dialogue with senior management to make sure there is clarity on what that is?
Are choices across the value chain intergated? i.e. Does your company gather people from across the company to interact?
Finally, what is the continuity of your strategy like? Are you ziging and zagging constantly, or do you have continuity?