If a strategy meets a goal: It's working. If a strategy meets a target: It's a success.
Michael PorterRead
There's a fundamental distinction between strategy and operational effectiveness.
Interpretation
What this quote means
Strategy focuses on the long-term plan and direction while operational effectiveness is about performing tasks efficiently.
In this quote, Michael Porter highlights the important difference between having a strategy and being operationally efficient. While operational effectiveness refers to performing tasks in the best possible way, strategy involves making choices about how to position a company for long-term success and competitive advantage. A company can be very efficient but may still fail if it does not have a clear strategic direction that differentiates it in the market.
Themes
StrategyOperational EffectivenessBusinessManagementEfficiency
In practice
Example use cases
In a business meeting discussing future goals, one might say, 'Remember what Michael Porter said about the distinction between strategy and operational effectiveness.'
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As a multisport athlete, I was always fascinated with competition and how to win. At HBS and later at the Harvard Department of Economics, I was drawn to the field of competition and strategy because it tackles perhaps the most basic question in both business management and industrial economics: What determines corporate performance?
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In a period of economic downturn, the overwhelming instinct is to pare back, cut costs, and lay off. If you do that, do so with your strategy in mind. The worst mistake is to cut across the board. Instead, reconnect and recommit to a clear strategy that will distinguish yourself from others.
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I think that, too many times, business has been seen as acting in its narrow self-interest rather than, essentially, contributing more broadly to society. I think a lot of that is unintentional; I don't think that many managers are deliberately trying to be unethical or are not trying to be sensitive to social needs.
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If your goal is anything but profitability - if it's to be big, or to grow fast, or to become a technology leader - you'll hit problems.
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