Naval Ravikanth on Work Hacks he has devised

Found these thoughts by Naval Ravikanth (@naval) very interesting.

• No meetings before 11am. 
• No meetings when emails or calls will do. 
• Don’t schedule calls, text coordinate them on the fly when possible. 
• Cram all meetings into two days a week. 
• 1-on-1s are usually 30-minute walking meetings. (Meetings are the death of productivity)

• Delete emails w/o responding or flinching. 
• Don’t set up voicemail. 
• Don’t travel purely for business. 
• Don’t go to conferences unless speaking. 
• Eat dinner with friends or family. 
• Use blocks of open time to create, make good decisions, & focus on important over urgent.

Steve Jobs on Managing People

Pl. take a look at this video (2.5mins) where Steve Jobs talk about how things are managed at Apple. I also reco watching the entire interview (1.5hrs) here.

Is your team overwhelmed?

If Your Team Is Overwhelmed, What Can They Stop Doing?

Project overload is real. But as a leader, it can be hard to tell whether your team needs more resources or just could be working more efficiently. Start by asking people to identify their key activities and how much time they spend on them in a typical week. Use that data to assess workloads and priorities. Consider which tasks the team could stop doing and which might benefit from having their process rethought. Pay special attention to low-value projects that have to get done but that take up an inordinate amount of time. Are there ways to simplify the workflows to reduce the amount of time your team spends in these areas? And last but not least, look for tasks that simply can be done more quickly. If your team is still struggling after these steps, it might be time to hire more people.

(From HBR)

Excerpts from the book: Radical Candor: How to Get What You Want by Saying What You Mean

Excerpts from the book: Is my series where I share some highlights and notes I made while reading some book that I think is good, thought provoking and worth sharing.

Radical Candor: How to Get What You Want by Saying What You Mean

Radical Candor is the sweet spot between managers who are obnoxiously aggressive on the one side and ruinously empathetic on the other. It is about providing guidance, which involves a mix of praise as well as criticism – delivered to produce better results and help your employees develop their skills and increase success. Great bosses have a strong relationship with their employees, and Scott has identified three simple principles for building better relationships with your employees: make it personal, get stuff done, and understand why it matters.

• By failing to confront the problem, I’d removed the incentive for him to try harder and lulled him into thinking he’d be fine. To make matters worse, I kept making the same mistake over and over for ten months. As you probably know, for every piece of subpar work you accept, for every missed deadline you let slip, you begin to feel resentment and then anger. You no longer just think the work is bad: you think the person is bad. This makes it harder to have an even-keeled conversation. You start to avoid talking to the person at all.
• As is often the case when people are not sure if the quality of what they are doing is appreciated, the results began to suffer, and so did morale.
• Lack of praise and criticism had absolutely disastrous effects on the team and on our outcomes.
• Results has a lot more to do with listening and seeking to understand than it did with telling people what to do; more to do with debating than directing; more to do with pushing people to decide than with being the decider; more to do with persuading than with giving orders; more to do with learning than with knowing.
• Relationships may not scale, but culture does. Is “relationship” really the right word?
• We are all more likely to be “ruinously empathetic” or “obnoxiously aggressive” or “manipulatively insincere” toward people who are different from us. Learning how to push ourselves and others past this discomfort, to relate to our shared humanity, can make a huge difference. PART I A NEW MANAGEMENT PHILOSOPHY
• Richard Tedlow’s biography of Andy Grove, Intel’s legendary CEO, asserts that management and leadership are like forehand and backhand. You have to be good at both to win.
• RELATIONSHIPS, NOT POWER, DRIVE YOU FORWARD
• Very few people focus first on the central difficulty of management that Ryan hit on: establishing a trusting relationship with each person who reports directly to you.
• Nevertheless, these relationships are core to your job. They determine whether you can fulfill your three responsibilities as a manager: 1) to create a culture of guidance (praise and criticism) that will keep everyone moving in the right direction; 2) to understand what motivates each person on your team well enough to avoid burnout or boredom and keep the team cohesive; and 3) to drive results collaboratively. If you think that you can do these things without strong relationships, you are kidding yourself. I’m not saying that unchecked power, control, or authority can’t work. They work especially well in a baboon troop or a totalitarian regime. But if you’re reading this book, that’s not what you’re shooting for.
• Your ability to build trusting, human connections with the people who report directly to you will determine the quality of everything that follows.
• And yet challenging people is often the best way to show them that you care when you’re the boss. This dimension I call “Challenge Directly.”
• “Radical Candor” is what happens when you put “Care Personally” and “Challenge Directly” together.
• It turns out that when people trust you and believe you care about them, they are much more likely to 1) accept and act on your praise and criticism; 2) tell you what they really think about what you are doing well and, more importantly, not doing so well; 3) engage in this same behavior with one another, meaning less pushing the rock up the hill again and again; 4) embrace their role on the team; and 5) focus on getting results.
• Why “candor”? The key to getting everyone used to being direct when challenging each other (and you!) is emphasizing that it’s necessary to communicate clearly enough so that there’s no room for interpretation, but also humbly. I chose “candor” instead of “honesty” because there’s not much humility in believing that you know the truth. Implicit with candor is that you’re simply offering your view of what’s going on and that you expect people to offer theirs. If it turns out that in fact you’re the one who got it wrong, you want to know. At least I hope you want to know!
• Why some people live productively and joyfully while others feel, as Marx put it, alienated from their labor—was central to a boss’s job. In fact, part of my job was to figure out how to create more joy and less misery. 
• To most bosses, being professional means: show up at work on time, do your job, don’t show feelings (unless engaged in “motivation” or some such end-driven effort). The result is that nobody feels comfortable being who they really are at work.
• Just remember that being a boss is a job, not a value judgment.
• Why do I say “caring personally” instead of just “caring”? Because it’s not enough to care about the person’s work or the person’s career. Only when you actually care about the whole person with your whole self can you build a relationship.
• It’s about finding time for real conversations; about getting to know each other at a human level; about learning what’s important to people; about sharing with one another what makes us want to get out of bed in the morning and go to work—and what has the opposite effect.
• In the end, caring personally about people even as you challenge them will build the best relationships of your career.
• The hardest part of building this trust is inviting people to challenge you, just as directly as you are challenging them.
• “If we have the data about what works, let’s look at the data, but if all we have are opinions, let’s use yours,”
• Radical Candor is also not an invitation to nitpick. Challenging people directly takes real energy—not only from the people you’re challenging but from you as well. So do it only for things that really matter. A good rule of thumb for any relationship is to leave three unimportant things unsaid each day.
• BOTH DIMENSIONS OF Radical Candor are sensitive to context. They get measured at the listener’s ear, not at the speaker’s mouth. Radical Candor is not a personality type or a talent or a cultural judgment. Radical Candor works only if the other person understands that your efforts at caring personally and challenging directly are delivered in good faith.
• Giving meaningful praise is hard. That’s why it’s so important to gauge your guidance—to find out how it lands for people.
• But here’s a paradox of being a good boss. Most people prefer the challenging “jerk” to the boss whose “niceness” gets in the way of candor. I once read an article that claimed most people would rather work for a “competent asshole” than a “nice incompetent.” This article was a useful expression of the Catch-22 that worried me about being a boss. Of course I didn’t want to be incompetent. Nor did I want to be an asshole.
• THERE’S A RUSSIAN anecdote about a guy who has to amputate his dog’s tail but loves him so much that he cuts it off an inch each day, rather than all at once. His desire to spare the dog pain and suffering only leads to more pain and suffering. Don’t allow yourself to become that kind of boss!
• In my experience, people who are more concerned with getting to the right answer than with being right make the best bosses. That’s because they keep learning and improving, and they push the people who work for them to do the same. A boss’s Radically Candid guidance helps the people working for them do the best work of their lives.
• Not all artists want to own a gallery; in fact, most don’t. If you honor and reward the rock stars, they’ll become the people you most rely on. If you promote them into roles they don’t want or aren’t suited for, however, you’ll lose them—or, even worse, wind up firing them. Superstars, on the other hand, need to be challenged and given new opportunities to grow constantly.
• No person is always an “excellent performer.” They just performed excellently last quarter.
• You don’t want to be an absentee manager any more than you want to be a micromanager.
• mediocre. And seeing what truly exceptional performance looks like will help those who are failing to see more clearly what’s expected of them.
• David noticed when things were broken and rolled up his sleeves to fix them, even if they weren’t in his job description. Clearly David would always push for excellence in his work, no matter what job he had. He would not just do more than was required; he’d do things you didn’t even think were possible. He exemplified the advice from Ecclesiastes: “Whatsoever thy hand findeth to do, do it with thy might.”
• In many ways, your job as the boss is to set and uphold a quality bar. That can feel harsh in the short term, but in the long run the only thing that is meaner is lowering the bar. Don’t get sucked into Ruinous Empathy when managing people who are doing OK but not great! Everybody can excel somewhere.

Are you a high potential?

As you'd be aware, we in NI have adopted 9-box-criteria that rates every employee on a grid of performance and potential. Most of us normally understand what is meant by performance, however, we'd need some objective way to determine the potential exhibited. I've always referred to this Harvard Business Review article Are You a High Potential? to both understand and articulate. Further, we also have adopted a set of 10 questions from a Harvard Business Study to assess the potential.

Traits of an effective manager at Google

Lately, I've been looking for articles on how successful MNC sets expectations for its employees and leaders. I've covered the same for Amazon and Netflix for now. I stumbled upon an article that lists 8 habits of effective managers at  Google  based performance reviews, surveys and nominations for top manager awards. I've copied them here for your quick reference:

• Be a good coach;
• empower your team and don't micromanage;
• express interest in employee's success and well-being;
• be productive and results-oriented;
• be a good communicator and listen to your team;
• help your employees with career development;
• have a clear vision and strategy for the team; and
• have key technical skills, so you can help advise the team.

If you have such publicly available docs at other companies, please let me know

#DontCarryLaptopToMeetings

In my previous blog post on habits to be kicked out, one of the habit was carrying laptop to meetings. I got a few comments (both online and face-to-face), that how difficult it is to do so. I respectfully disagree. I guess it is more to do with meeting effectiveness (or rather lack of it) which drives people to carry laptops. 

It is probably a good idea to carry the laptop to the meeting for the following purposes:
- You are taking notes
- You are presenting
- Need it to log into Skype
- Keep it as backup, so you can quickly look up for some info that might be needed
- You are so important that heavens will fall if you are not on IM for a few minutes
(may be couple more).

I find it annoying when people bring the laptop and keep working and show interest only for part of the meeting or when called out specifically. Though I'm also guilty (a bad habit I picked up at NI) of carrying the laptop, it is really downright respectful for whoever is on the stage. It just says I don't care about you, I've more important work (if that really is the case, people should not come to the meeting).

However, if you want to strictly enforce it, we need to make sure that we know how to run meetings - the meeting agenda is set, pre-read materials are sent well in advance, presenters and audience come prepared, the meeting is as short as it is really reqd, action items are noted, contentious and philosophical debates are parked if no decision is arrived and/or in cases where there is no clarity on "who has the D". I suspect most of us carry the laptop because very few of the above are happening (I've been in meetings where the organiser is wondering what to discuss after starting the meeting, people are not on time, folks that are expected to present will try to talk extempore and therefore rumble, toss random ideas without any clear thought etc., no action items get generated at the end of the meeting etc., etc., The only option then, for the people that do not want to waste time is to switch off and attend to some work). We also have some meetings that are there for historical reasons and long after they have become irrelevant (in which you'd see most of the above). There are also some people that argue to have meetings "even if we don't have an agenda", just so that we are consistent and people are in the know of whats going on (as if there is no other means to seek the info we need!!)

I've a mentor who asks the following each time he gets an invite: a. Whats the agenda, b. Whats the value add you are expecting from me, c. Whats the value add for me . You guessed it, he hardly gets any invite and remains ultra focussed on his work. More on running efficient meetings in this beautiful book - Read this before our next meeting: How we can get more done.

We can try bring about the change by following:

- Seek/circulate agenda and refuse to attend/call a meeting that has no agenda

- Seek/provide pre-reads, especially when a decision has to be made based on the info presented 

- Go prepared with questions (better still seek answers from the presenter even before the meeting)

- Make sure you are not calling the meeting or inviting someone just to be politically correct

- Show interest in other's work, you may after all learn something new. If there are many presenters, call people only for their section

- Periodically check whether the rituals that exists from past continue to be relevant (don't go on a ego trip)

- Try defaulting every meeting to 30mins (most people have a tendency to call for a 1 hr meeting), try moving weekly meeting to fortnightly, fortnightly to monthly and monthly to quarterly.

- See whether the discussions can be moved to email or on NI-Talk (so that people can respond when they find time)

- Model the right behaviour by following good meeting etiquette both as a participant and also as the chair.

- Make it explicit that it is OK to decline the meeting and that you discourage people working in the meeting

If we do some of the above, I can bet people need not have to bring their laptops.

Built to Last

One of the oft repeated phrases of Dr. T is that "NI is built to last". And there are no second thoughts about it. The ideas are taken from Jim Collin's seminal books Built to Last and Good to Great - both are part of NI's essential reading for leaders. I chanced upon an abstract by the author himself. If you are in a hurry, here are the top ideas from Built to Last:

• Be a clock builder, not a time teller
• Build the company around a core ideology
• Build a cult-like culture
• Homegrow your management
• Stimulate progress thru BHAGs, experimentation and continuous improvement
• Embrace the "genius of the AND"

Curious? Abstract is here.

The Leader vs Manager debate

Leadership and management are two distinctive and complementary systems in action. Each has its own function and characteristic activities and both are essential.

However, management is about coping with complexity and leadership is about coping with change. While most companies tend to be over managed and underled, the reverse (overled and undermanaged is not necessarily better either). Consider a simple military analogy: A peacetime army can usually survive with good management up and down the hierarchy with some really good leadership at the top. However, a wartime army require competent leadership at all levels. No one yet has figured out how to manage people effectively into a battle; they must be led.

These different functions - coping with complexity vs coping with change - shape the characteristic activities of management and leadership. Each system of action involves what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure that those people actually do the job. But each accomplishes these three tasks in different ways.

1. Companies manage complexity by planning and budgeting and establishing detailed steps to achieve those and allocating resources to accomplish these plans. By contrast leading an organization to constructive change begins first by setting a direction - developing a vision and strategies to accomplish that vision.

2. Management develops the capacity to achieve its plan by organising and staffing and devising systems to monitor implementation. The equivalent leadership activity is aligning people - communicating the direction and getting commitment.

3. Finally, management ensures plan accomplishment by controlling and problem solving - monitoring results vs plan by means of reports, meetings etc., and then planning and organising to solve the problems. But for leadership, achieving a vision requires motivating and inspiring, by appealing to basic but often untapped human needs, values and emotions.

Excerpts from HBR article What Leaders Really Do - John Kotter.

Effective Management Tip: Check Small Things

Many folks confuse that great leadership is mostly about vision and rallying troops to embrace the vision. While there isn't anything wrong with being a visionary, in reality though a large success is built on a series of many small things and the knowledge of those small things. Attention to (excessive) detail if you will. 

Worth quoting a story about Gen Colin Powell that I read somewhere. When Powell was in the Army and responsible for inspecting the barracks, he'd check the toilets — not to see if they were clean. "Was there a shortage of toilet paper, were any mirrors cracked, were there any missing showerheads? Finding any of these situations immediately told me one of several things — the unit is running short on upkeep money, no one is checking up on these things to get them fixed, or the troops are not being supervised well enough. Find out which and fix it."

Effective Management Tip: Loose or Tight Control

One thing all of us, managers, struggle is how tight you want to control something. You control tight, it surely leads to frustration. You let loose, chances are someone will goof up. Ofcourse THE best method to lead someone is based on the principles of "Situational Leadership", that says your leadership style should dependent on the task and the person's competence and temperament to do that particular task. However, on a day to day basis we come across numerous events that calls for some type of control, and the temptation is always to control it tight. I use the following to make a decision on what type of control one should use:

Tight Control: Rigor, Quality, Commitments, Customer escalations, Things related to NI core values and culture

Loose Control: Work plan/approach, individual preferences not coming in the way of team effectiveness,

The key idea is to make sure we keep humans as humans. Love to hear your thoughts.

Mapping Decline and Recovery Across Sectors

McKinsey Quarterly has come-up with a study where they looked at the financial performance of US companies in the last 4 recessions and then analyzed how different sectors enter and emerge from recessions at different times. This is an interesting study for those who are actively involved in the strategy formulation of an organization and/or plain students of strategy. Here are some of their key observations:

1. Similar beginnings: All 4 recessions started with a dip in consumer discretionary sector and spread through the economy.
2. Variable magnitude: The size of the dip in EBITA varies across sectors
3. Speed of decline and recovery: Sectors contracted much more quickly than they recovered
4. Share price performance: Share prices tend to decline before or just after the recessions starts and tend to rise near the end of recession and in either case the actual financial performace of the organization reflects the share prices, with a lag.

Entire report is available here (registration is needed and is free).

Thank you very much,


RamP!

Presentation of Doom

Techcrunch managed to get their hands on the presentation of doom, that Sequoia sent to the CEO's of the companies where they have put their monies. The presentation has a detailed analysis of how the situation became this bad, suggestions to manage in the turbulent times and their take on what might happen in M&A world.

Get Real or Go Home .....
is what their last slide tells.

You may also want to check out Guy Kawasaki's latest post How to tell whether your CEO is clueless.

RamP!

Strategy School 10: The Configuration School

10. The Configuration School: (Strategy formation as a process of transformation)

This post is continuation of my previous posts on strategy, based on Mintzberg's book Strategy Safari.

This school differs from all the others in one fundamental respect: it offers the possibility of reconciliation, one way to integrate the messages of the other schools.
Among the types of stages within an organization we find:

• Stage of development
• Stage of stability
• Stage of adaptation
• Stage of struggle
• Stage of revolution

Premises of the Configuration School

• Most of the time, an organization can be described in terms of some kind of stable configuration of its characteristics: for a period of time, it adopts a particular form of structure matched to a particular type of context which causes it to engage in particular behaviours that give rise to a particular set of strategies
• These periods of stability are interrupted occasionally by some processes of transformation- a quantum leap to another configuration
• These successive states of configuration and periods of transformation may order themselves over time into pattern sequences, for example describing life cycles of organizations
• The key to strategic management, therefore, is to sustain stability or at least adaptable strategic change most of the time, but periodically to recognize the need for transformation and be able to manage that disruptive process without destroying the organization
• Accordingly, the process of strategy making can be one of conceptual designing or formal planning
• The resulting strategies take the form of plans or patterns, positions or perspectives.

Critique of the Configuration School

• Organizations come in “many shades of gray and not just black and white”!

Thank you very much,

RamP!

Strategy School 9: The Environmental School

9. The Environmental School: Strategy formation as a Reactive Process

This post is continuation of my previous posts on strategy, based on Mintzberg's book Strategy Safari.

Leadership as well as organization becomes subordinate to external environment. The environmental school has its roots in contingency theory, which grew up to oppose the confident assertions of classical management that there is “one best way” to run the organization. To contingency theorists, “it all depends”: on the size of the organization, its technology, the stability of its context, external hostility, and so on.

Premises of the Environmental School

• The environment, presenting itself to the organization as a set of general forces, is the central actor in the strategy-making process
• The organization must respond to these forces, or else be “selected out”
• Leadership thus becomes a passive element for purposes of reading the environment and ensuring proper adaptation by the organization
• Organizations end up clustering together in distinct ecological-type niches, positions where they remain until resources become scarce or conditions too hostile. Then they die.

Critique of the Environmental School

The greatest weakness is that environment is often so abstract and vague.

Thank you very much,

RamP!

Strategy School 8: The Cultural School

8. The Cultural School (Strategy formation as a collective process)

This post is continuation of my previous posts on strategy, based on Mintzberg's book Strategy Safari.

Culture was "discovered" in management in the 1980s, thanks to the success of Japanese corporations. They seemed to do things differently than Americans. All fingers pointed to Japanese culture, and especially how that has been manifested in large Japanese corporations.

Bjorkman has pointed that radical changes in strategy have to be based on fundamental change in the culture. He described this as happening in the following 4 phases:

• Strategic drift
• Unfreezing of current belief systems
• Experimentation and re-formulation
• Stabilization

Premises of the cultural school:

• Strategy formation is a process of social interaction, based on the beliefs and understandings shared by the members of an organization
• An individual acquires these beliefs through a process of acculturation, or socialization, which is largely tacit and nonverbal.
• The members of an organization can only partially describe the beliefs that underpin their culture
• As a result, strategy takes the form of perspective above all, more than positions, rooted in collective intentions and reflected in patterns by which the deeply embedded resources, of the organization are protected and used for competitive advantage
• Culture do not encourage strategic change; at best, they tend to promote shifts in positions

Critique of the Cultural School

Cultural school should be faulted for conceptual vagueness. It can discourage necessary change. It favours the management of consistency, of staying on track.

Thank you very much,

RamP!

Strategy School 6: The Learning School

6. The Learning School (Strategy formation as an emergent process)
This post is continuation of my series of posts on strategy, based on Mintzberg's book Strategy Safari.

According to this school, strategies emerge as people, sometimes acting individualy but more often collectively, come to learn about a situation as well as their organization's capability of dealing with it.

Principles of the learning organization: (Joseph Lampel)

• Organizations can learn as much, if not more, from failure as from success
• A learning organization rejects the adage "if it ain't broken, don't fix it".
• Learning organizations assume that the managers and workers closest to the design, manufacturing, distribution and sale of the product often know more about these activities than their superiors.
• A learning organization actively seeks to move knowledge from one part of the organization to another, to ensure that relevant knowledge finds its way to the organizational unit that needs it most.
• Learning organizations spend a lot of energy looking outside their own boundaries for knowledge

Premises of the learning school:

• The complex and unpredictable nature of the organization's environment, often coupled with the diffusion of knowledge bases necessary for strategy, precludes deliberate control; strategy making must above all take the form of a process of learning over time, in which, at the limit, formulation and implementation become indistinguishable.
• While the leader must learn too, and sometimes can be the main learner, more commonly it is the collective system that learns: there are many potential strategists in most organizations.
• This learning proceeds in emergent fashion, through behavior that stimulates thinking retrospectively, so that sense can be made of action.

Critique of the learning school:

• There is always a danger of going to the opposite extreme - no strategy, lost strategy or wrong strategy.

Thank you very much,

RamP!

Strategy School 5: The Cognitive School

5. The Cognitive School (Strategy formation as a Mental Process)

This post is continuation of my previous posts on strategy, based on Mintzberg's book Strategy Safari.
If we are serious about understanding strategic vision as well as how strategies form under other circumstances, then we had better probe into the mind of the strategist. This is the job of cognitive school:

• Cognition as Confusion
• Cognition as Information Processing
• Cognition as Mapping
• Cognition as Construction

Premises of the Cognitive School

• Strategy formation is a cognitive process that take place in the mind of the strategist
• Strategies thus emerge as perspectives that shape how people deal with inputs from the environment
• These inputs flow through all sorts of distorting filters before they are decoded by the cognitive maps
• As concepts, strategies are difficult to attain in the first place, considerably less than optimal when actually attained, and subsequently difficult to change when no longer variable

Critique of the Cognitive School

The school is characterized more by its potential than by its contribution.
Thank you very much,

RamP!

Strategy School 4: The Entrepreneurial School

4. The Entrepreneurial School (Strategy Formation as a Visionary Process)
This post is continuation of my previous posts on strategy, based on Mintzberg's book Strategy Safari.

In this school, the strategy formation process is focused on the single leader (usually the CEO) and is built on a vision. Proponents of this school saw personalized leadership, based on strategic vision , as the key to organizational success - not only in starting up and building new organizations, but also in "turning around" faltering organizations.

The chief characteristics to strategy making suggested by Mintzberg, 1973:

• In the entrepreneurial mode, strategy making is dominated by the active search for new opportunities
• In the entrepreneurial organization, power is centralized in the hands of the CEO
• Strategy making in the entrepreneurial mode is characterized by dramatic leaps forward in the face of uncertainty
• Growth is the dominant goal of the entrepreneurial organization

Premises of the Entrepreneurial School

• Strategy exists in the mind of the leader as a perspective, a vision of the organization’s future
• The process of strategy formation is semiconscious at best, rooted in the experience and intuition of the leader
• The leader promotes the vision under close personal control in order to be able to reformulate specific aspects if necessary
• The strategic vision is thus malleable, and so the entrepreneurial strategy tends to be deliberate and emergent
• The organization is likewise malleable, a simple structure responsive to the leader’s directives
• Entrepreneurial strategy tends to take a form of a niche, one or more pockets of market position protected from the forces of outright competition

Critique of the Entrepreneurial School

It presents strategy formation as all wrapped up in the behaviour of a single individual. This has remained largely a black box. So for the organization that runs into difficulty, this school’s central prescription can be all too obvious and facile: find a new visionary leader.

Thank you very much,

RamP!

Strategy School 3: The Positioning School

3. The Positioning School (Strategy Formation as an Analytical Process)
This post is continuation of my previous posts on strategy, based on Mintzberg's book Strategy Safari.
While the Design School and Planning Schools didn't put any limits on the strategies that were possible in any given situation, the positioning school, in contrast, argued that only a few key strategies - as positions in the economic market place are desirable in any given industry: ones that can be defended against existing and future competitors. Cumulating this logic across industries, this school ended up defining what are called generic categories of strategies - for example, product differentiation and focused market groups.
Premises of the Positioning School

1. Strategies are generic, specifically common, identifiable positions in the market place.
2. The marketplace (the context) is economic and competitive.
3. The strategy formation process is therefore one of selection of these generic positions based on analytical calculation.
4. Analysts play a major role in this process, feeding the results of their calculations to managers who officially control the choices.
5. Strategies thus come out from this process full blown and are then articulated and implemented; in effect, market structure drives deliberate positional strategies that drive organizational structure.

Enter Michael Porter

Porter's Competitive Strategy (1980) and Competitive Advantage (1985) offered a set of concepts to build on. The most prominent among these concepts have been his model of competitive analysis, his set of generic strategies and his notion of value chain. We will take a brief look at each of these:
Competitive Analysis:
Porter's model of competitive analysis identifies five forces in an organization's environment that influences competition. They are:

• Threat of new entrants
• Bargaining power of firm's suppliers
• Bargaining power of firm's customers
• Threat of substitute products
• Intensity of rivalry among competing firms

Given the range of possible external forces, one might imagine that the range of possible strategies is large. But Porter takes the opposite position: only a few generic strategies survive the competition in the long run and this notion is what really defines the positioning school.

Generic Strategies:
Porter argued that there are two basic types of competitive advantage a firm can possess: low cost or differentiation. Being "all things to all people", Porter argued, is a recipe for strategic mediocrity and below-average performance. Combined with the "scope" of a particular business, Porter defined the following three generic strategies:

• Cost Leadership: Low cost producer in the industry.
• Differentiation: Development of unique products or strategies
• Focus: Seek to serve narrow market segments

Value Chain:
Porter introduced a framework he called the value chain. It suggests that a firm can be disaggregated into primary and support activities. Primary activities are directly involved in the flow of product to customer. Support activities exist to support primary activities. Firms achieve profit margins based on how the value chain is managed.
Critique of the Positioning School

1. Concerns about Focus: The approach is not wrong, but the focus tend to be narrow.
2. Concerns about Context: The bias is clearly towards traditional big business
3. Concerns about Process: The message is not to get out there and learn, but to stay home and calculate.
4. Concerns about Strategies: At the limit, the process can reduce to a formula, whereby such a position is selected from a restricted list of conditions.

We are not ready to explore the Entrepreneurial School.

Thank you very much,


RamP!