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Right this minute, in offices around the world, business-people are holding high-level meetings to talk about strategy. They\u2019re trying to figure out if they can really achieve the lowest costs, or if they should focus on differentiating their product or try to dominate a niche in the business, and someone is suggesting they try to do a little bit of each, and someone else is replying they\u2019d be doomed. \u201cShould we really be doing all the activities in the value chain?\u201d \u201cNo! We need to outsource!\u201d The meetings are getting heated because everyone realizes the decisions could mean life or death.<\/p>\n
If you interrupted one of these meetings and asked the participants why they\u2019re discussing these questions, they\u2019d look at you funny. It\u2019s perfectly obvious, after all, that these are the most crucial issues. We talk about them because we have to, and everyone has been talking about them since the dawn of time, they would tell you. But they would be mistaken.<\/p>\n
Generally without knowing it, they\u2014we\u2014are speaking the language of Harvard\u2019s Michael Porter, the most famous and influential business professor who has ever lived. Incredible as it seems, there was a time when these concepts were not the foundation of most business thinking. Says Roger Martin, the longtime dean of the University of Toronto\u2019s Rotman School of Business and a former colleague of Porter\u2019s: \u201cEveryone who talks about sustainable competitive advantage and how they\u2019re going to get it \u2014 they don\u2019t say, \u2018This meeting is occurring because Mike Porter said it\u2019s important.\u2019 But that is why.\u201d<\/p>\n
Businesspeople aren\u2019t the only ones who speak Porter\u2019s language. Leaders of nations, regions, and cities use his \u201cdiamond model\u201d to frame their plans for becoming more competitive. Environmental policymakers apply the Porter hypothesis. Health care reformers study his work on transforming that broken industry.<\/p>\n
MORE: \u00a0What business should do to restore competitiveness \u00a0<\/p>\n
Now Porter aims to change the conversation on another vast topic: America\u2019s competitiveness. The Harvard Business School\u2019s U.S. Competitiveness Project, led by Porter and professor Jan Rivkin, is unlike anything the school has attempted: recruiting scholars from inside and outside the school to achieve a specific goal \u2014 making the U.S. more competitive. \u201cWe\u2019ve never done this before, and shame on us, frankly,\u201d Porter says. \u201cLook at the tremendous goodwill and influence we have. People listen, and we have to take advantage of that.\u201d Porter takes pains to point out that dozens of people besides him are working on the project. But it\u2019s clear that if he hadn\u2019t agreed to be involved \u2014 to be \u201cthe tip of the spear,\u201d as Rivkin puts it \u2014 the project might not have happened.<\/p>\n
One of the project\u2019s central theses is that most debates about U.S. competitiveness are wrong to focus almost entirely on federal government action. That\u2019s why Porter and Rivkin have written this article describing how companies can make America more competitive while also advancing their own interests. In this, as in everything he does, Porter wants to exert influence: \u201cWe want every businessperson to read that article and put it down and say, \u2018You know what? Damn it, we\u2019re gonna do this!’\u201d<\/p>\n
You might suppose that Porter, at 65 and having exerted a career\u2019s worth of influence, might be ready to hang it up. He isn\u2019t. He looks 55 and has more energy than the average 35-year-old. \u201cWhat I\u2019m particularly fortunate about,\u201d he says \u2014 he talks a lot about how lucky he has been \u2014 \u201cis that I really love doing this stuff. I mean, I\u2019m not tired of it. I\u2019m not fatigued. So many academics get tired.\u201d<\/p>\n
In a recent typical week, he wrote during a flight back to Boston from London, met editors at the Wall Street Journal, did a video interview at the Huffington Post, and appeared on CNBC; he held several meetings or conferences at Harvard, spoke twice at a large conference of the Initiative for a Competitive Inner City, a nonprofit he founded in 1994, and advised Kohlberg Kravis Roberts, Newark Mayor Cory Booker, a Fortune 500 CEO, and the government of Rwanda. He seems to subsist on air. Joan Magretta, a former consultant who became a Harvard Business Review editor and wrote a book called Understanding Michael Porter, says, \u201cI\u2019ve worked with Mike for 30 years and have never seen him eat a meal.\u201d<\/p>\n
A book on understanding Porter is worthwhile because he\u2019s often misunderstood. He is widely and rightly regarded as the all-time greatest strategy guru, but that view gets the emphasis wrong. His first important book, published in 1980, was Competitive Strategy. Next came Competitive Advantage, followed by The Competitive Advantage of Nations and On Competition; there\u2019s his Initiative for a Competitive Inner City, and of course he\u2019s now working on the U.S. Competitiveness Project. Are you noticing a theme?<\/p>\n
MORE:\u00a0Business\u2019s real problem: Uncertainty, uncertainty, uncertainty<\/p>\n
Competition and winning have defined Porter\u2019s work and in large part his life. He has said that sports were the center of his existence as a kid, and at Monmouth Regional High School in New Jersey he was an all-state football and baseball player. At Princeton, where he majored in aeronautical engineering, he made the NCAA All-America golf team and graduated Phi Beta Kappa. He went directly to the Harvard Business School, where he realized he wanted to teach and where he became a Baker Scholar, a distinction reserved for the top 5% of the class. He then made the unorthodox move of crossing the Charles River to get a Ph.D. in Harvard\u2019s economics department; he won the prize for the year\u2019s best thesis. Then he recrossed the river to teach at HBS.<\/p>\n
Eight years after graduating from high school, he was teaching at the world\u2019s No. 1 business school.<\/p>\n
He already knew what the focus of his research would be. As an HBS student, he had absorbed \u201cthe practitioner view of competition,\u201d but back then it didn\u2019t include many general insights; each case was unique. As an economist, he understood \u201cthe more abstract view of competition that one saw in industrial economics,\u201d and it was the opposite: Individual firms were all pretty much the same and not interesting. \u201cIt was the juxtaposition of these various kinds of training that made it sort of obvious what some of the rich opportunities were,\u201d he says. So those were what he worked on.<\/p>\n
He explained the results in Competitive Strategy, which quickly became the bestselling business book ever up to that time. Every company, he said, is subject to five forces: the competitors it currently faces, the threat of new competitors, the threat of substitutes for its products or services, the bargaining power of its suppliers, and the bargaining power of its customers. Within that environment, every company must choose a strategy, and there are only three: achieving the lowest costs, differentiating its products and services, and dominating a niche. Trying to do some of each \u2014 getting \u201ccaught in the middle\u201d \u2014 prevents a company from realizing the benefits of any of these strategies, and as a result it will lose to competitors who choose just one.<\/p>\n
The book revolutionized managerial thinking around the world and made Porter famous. It also sparked another widespread reaction: \u201cThe highest compliment, I\u2019ve come to understand, is, \u2018Oh, that\u2019s obvious,’\u201d Porter says. \u201cI used to get really mad about that, but now I understand that\u2019s the goal \u2014 to take a complex problem and make it seem really clear and obvious.\u201d Real-world practitioners agree. \u201cThe five-forces framework is as valid today as it was then,\u201d says Adrian Slywotzky, a consultant.<\/p>\n
A great paradox of Porter\u2019s career is that he has achieved the summit of academic distinction while loudly rejecting the No. 1 rule of the academic game. It states that all advancement depends on publishing as many articles as possible in the few dozen top-tier academic journals. Porter has scarcely bothered, publishing just seven such articles in his 39-year career. His many articles in the Harvard Business Review don\u2019t count; that\u2019s a mere \u201cpractitioner journal\u201d in the view of academics. Yet Porter holds a University Professorship at Harvard, the highest honor the school can bestow, held by about 1% of the faculty; it means he isn\u2019t tethered to any particular school within Harvard, not even the business school, but can roam across the entire university wherever his interests lead him.<\/p>\n
MORE:\u00a0How to secure America\u2019s future in manufacturing<\/p>\n
Another measure of his academic success, telling and ironic: In the many footnotes that follow every article in academic journals \u2014 the journals Porter has so frankly disdained \u2014 he has been cited far more often than any other writer on business or economics.<\/p>\n
The U.S. Competitiveness Project is the largest example yet of Porter\u2019s real-world influence. \u201cWe are judging this project on impact,\u201d says Rivkin. \u201cIt\u2019s successful to the extent we help companies operating in the U.S. compete in the global economy and raise the standard of living.\u201d<\/p>\n
With the U.S. Competitiveness Project well under way, what might Porter try to change next? He is taking advantage of his University Professorship, working in the School of Public Health to improve health in China, working at the Medical School on health care delivery in Africa, and teaching at the Kennedy School of Government. And Harvard has a lot more schools. \u201cYesterday I was meeting with the dean of the education school at Harvard, and we were talking about education,\u201d he says. \u201cThere\u2019s an opportunity to reframe that field. And I\u2019m very tempted.\u201d<\/p>\n
Porter knows he\u2019s trying to do too much. A lesson he has learned belatedly is to \u201cenroll others\u201d in his projects, with the U.S. Competitiveness Project as exhibit A. But taking on too much seems to be in his nature, so he\u2019ll probably keep doing it. At least until he gets tired. Which right now is not a real-world concern.<\/p>\n
This story is from the October 29, 2012 issue of\u00a0Fortune.<\/p>\n
#quit #Michael #Porter<\/p>\n","protected":false},"excerpt":{"rendered":"
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