The Most Common Strategy Mistakes

Michael Porter is the founder of the modern strategy field and one of the world’s most influential thinkers on management and competitiveness.  He is a professor at Harvard Business School and author of 19 books.  If you’ve studied strategy at all, Porter is a must read. 

We wrote about Porter’s interview with Joan Margretta, Porter’s former editor at Harvard Business Review, back in 2012 and offered a summary of Porter’s thinking on the subjects of strategy and competition.  It is interesting how some truths never change.  Here are a few excerpts from Margretta’s interview with Michael Porter when she asked the question: What are the most common strategy mistakes?

1. Managers confuse operational excellence with strategy or marketing with strategy. Managers tend to miss that strategy links choices on both the demand side (marketing) with the choices about the supply side (operational excellence).  You cannot have strategy without addressing both.
2. Over estimating strengths. Most companies have an inward looking bias and therefore are overzealous about what they do well.  Real strengths have to be something the company does better than its competitors.  And you do it better because you are approaching it in a different way than your competitors.   
3. Getting the definition of the business wrong. Defining the industry too narrowly could cause you to miss competitors outside your industry that could encroach on your markets.  Defining the industry too broadly can be dangerous because it can lead you to decisions that take you too far from your core competencies.
4. Not having a strategy at all. According to Porter, this is the worst mistake of all.  Many managers find it hard to make choices and accept limits to their business. They find it difficult to let go of anything irrespective of the fact that the product or market has lost its value.  Rather, they want to offer more products, serve more markets, and satisfy more customers in the name of growth.  The result is more complexity and misunderstanding in the ranks.   

Over our 27 years in business, we have helped many of our clients avoid these and other strategy mistakes.  What our clients have found most helpful is our ability to challenge the status quo and identify real competitive advantages leading to robust strategies and strong strategy execution processes.   

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Quote: “Having a strategy in the first place is hard.  Maintaining a strategy is even harder.” Michael Porter