Professor Michael Porter

The world's most famous business-school professor is tired of business leaders who claim that the world changes too fast to have a long-term strategy. If you want to make a difference as a leader strategy is essential, he will tell this autumn's Leaders in Dubai.
Professor Michael Porter argues that strategy and operational effectiveness need to be distinguished from each other: 'Strategy is about making choices, trade-offs; it's about deliberately choosing to be different. Operational effectiveness is about things that you really shouldn't have to make choices on; it's about what's good for everybody and about what every business should be doing.

'The essence of strategy is that you must set limits on what you're trying to accomplish. The company without a strategy is willing to try anything. If all you're trying to do is essentially the same thing as your rivals, then it's unlikely that you'll be very successful.

'It's incredibly arrogant for a company to believe that it can deliver the same sort of product that its rivals do and actually do better for very long. That's especially true today, when the flow of information and capital is incredibly fast. It's extremely dangerous to bet on the incompetence of your competitors — and that's what you're doing when you're competing on operational effectiveness.'

Professor Michael Porter is set to address the Leaders in Dubai which runs November 29-30. He is the Bishop William Lawrence University Professor, only the fourth member of the faculty to earn this distinction. Since joining the Harvard Business School in 1973, he has written 16 books and also advises top corporations on competitive strategy.

He contends that business leaders have concentrated too much on operational effectiveness rather than strategy. He points to the popular managerial enthusiasms of the late-twentieth century - total quality, just-in-time, business process re-engineeering - as typical examples. In his view, they were driven by the incredible competitiveness of the Japanese until the 1990s.

'A leader also has to make sure that everyone understands the strategy, he argues. 'Strategy used to be thought of as some mystical vision that only the people at the top understood. But that violated the most fundamental purpose of a strategy, which is to inform each of the many thousands of things that get done in an organization every day, and to make sure that those things are all aligned in the same basic direction.

'If people in the organization don't understand how a company is supposed to be different, how it creates value compared to its rivals, then how can they possibly make all of the myriad choices they have to make? Every salesman has to know the strategy - otherwise he won't know who to call on. Every engineer has to understand it, or she won't know what to build.'

Porter says, 'the best CEOs I know are teachers, and at the core of what they teach is strategy. They go out to employees, to suppliers, and to customers, and they repeat, 'This is what we stand for; this is what we stand for.' So everyone understands it.

'This is what leaders do. In great companies, the strategy becomes a cause. That's because a strategy is about being different,' he argues. So if you have a really great strategy, people are fired up and say 'We're not just another airline. We're bringing something new to the world.