Michael Porter describes strategies that successful businesses should pursue. Cost leadership is one example – being the cheapest. Differentiation is another -building something that is sufficiently different, and hard to copy, that people will pay for more it.
Like most solid reasoning, Porter’s approach sounds fairly obvious – implementation is the challenge. With that in mind two recent posts in HBR and TechCrunch highlight what these approaches look like.
- 1111 Lincoln Road – is a parking garage with such striking architecture that people want to get married there.
- The Henry Ford Hospital – is a hospital so well laid out that it feels like a hotel.
Will your next project driving to one of these outcomes? It’s easy to end up with average cost and limited differentiation, it’s much harder to be extreme on one or the other, but extremities are where the real value lies.
1111 Lincoln Road Parking Garage, Joe Vare via Flickr
Henry Ford Hospital via Flickr
The Raspberry Pi, A $25 PC
This short video provides a clear summary of Blue Ocean Strategy, one of the more innovative business strategy books of the past few years.
“Le mieux est l’ennemi du bien.” Dictionnaire Philosophique, Voltaire
The best is the enemy of the good. This is especially true with respect to innovative ideas. It is appealing to think that innovation is a quest to uncover that single, flawless idea. To scramble through the heap of incomplete and flawed thinking to reach the one complete concept, the single idea that is fundamentally superior to the others.
In practise, anything groundbreaking becomes groundbreaking through iteration and refinement. For example, the painter, Van Gogh produced 2,000 paintings and sketches in his lifetime, only a few of them are true masterpieces, most only receiving recognition after his death. In a second example, book publishing is described as more of a casino than a business in this New York Times article, with 70% of books losing money, it is not clear that the solution is to accept less book proposals, because success is so hard to predict.
The process that creates ‘the best’ ideas is starting with a good idea and iterating based on feedback. If you set the bar too high, or too ‘perfect’ for innovative ideas, two things will happen. Firstly, you won’t have as many ideas to refine and the chance of a having a great idea will be lower. Secondly, your ability to manage a real portfolio will be reduced. Strategy is deciding what not to do, and the broader set of ideas you have to implement, the more opportunity you have to craft a strategic portfolio of ideas to implement. Your great ideas are likely good ideas that mature, not great ideas that you simply identify.
Are you implementing enough good ideas, to get closer to finding a great one? Or are you being too picky?
Not sure if you read Joel Spolsky, his blog is mostly about software, but always insightful.
Here’s one of his best posts on business strategy – contrasting Amazon with Ben and Jerry’s:
A summary of interesting posts I’ve read in the past week, not necessarily PPM related.
A classic post by Seth Godin on online strategy, or indeed, strategy in general. Here.
A nice explanation of how Facebook’s apparently ‘creepy’ friend suggestions manage to appear without infringing your privacy from Slate Magazine. Here.
A business idea from Mark Cuban regarding New York and T-shirt vendors. Here.
Prototype of laser gun fired from an aeroplane. Here.
Application of game theory to baseball and American football. Are teams random enough? Here.
Interesting post from Seth Godin on the heirarchy of success. Though he mentions both strategy and execution, he sees attitude as the crucial element. Targetted at people, not organizations, but still insightful.