#86 Strategy Might Not Matter: A Look At Michael Porter

Today I’m going to begin a series of posts on small business strategy. I’m going to start by taking a behind the scenes look at one of my past employers - Powersoft Corporation. And we're going to use this story to try to figure out what strategy is and whether it matters to a small business.

POWERSOFT IN THE 1990’s

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In a time long ago the IT industry was sitting on the edge of a revolution.

Centralized computing departments had become all-powerful dictators. And the muggles that didn't understand technology - the poor folks in sales, marketing, finance, human resources, etc. - were at their mercy.

You'd request, on bent knee, something as simple as a change to a report - then you'd wait. For days, weeks, months. It was up to the all-powerful IT overlords whether a developer would ever be assigned to your request. 

Now, as you might guess, the muggles in the departments grew tired of this treatment. And as technology became more approachable, they began working behind the backs of the IT overlords. Quietly hacking together their own databases and applications. 

Then came liberation.

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Near April Fool's day of 1991 Microsoft gave the muggles a weapon that changed their lives - version 3.1 of Windows. This was the first version of the operating system that actually worked. You could now go an entire hour or more without having to reboot your personal computer.

So the emboldened muggles in the departments amped up their demands on IT. Build us these sexy new apps or we'll ignore you and build them ourselves. 

It was a powerful threat, even though it was a bit hollow. The real truth was that these new apps, connected to large sophisticated databases, were hard to build. Neither the muggles in the departments nor the IT staff had yet developed the skills to build them in a timely manner.

So anxiety was in the air, careers were on the line.

And that's when Powersoft showed up. With our magical development tools you could do in hours what had taken days with earlier products. 

It seemed almost too good to be true. In fact I was thrown out of a building once by a Fortune 100 IT manager that thought I was pedaling snake oil. But we weren't deterred. 

We spread our gospel to anyone that would listen. We worked with progressive IT departments that were sincerely trying to move forward and service their users. And we worked with renegade muggles trying to overthrow less progressive knuckle-dragging IT departments.

And gradually, over a year or more of spreading our gospel, we found traction. Developers that rescued and fast-forwarded their careers by latching onto our tools became emotionally attached to us. And they spoke up, providing amazing references. To the point that a competitor, over a friendly lunch discussion, accused us of running a cult.

And I've already told you the rest of the story. The company became the leader in the market and, a few years later, sold for just south of a billion dollars.

THE POWERSOFT STRATEGY

The ease of use of our products is what initially drew folks to us. So maybe that was our strategy - be easy. There were other things we did that also fit that theme. Things like…

We used an easy to digest one page contract. Back then potential customers were used to drawn out nitpicking legal negotiations with folks like database vendors. We offered the opposite experience. Why bother fighting over a bunch of extra legal crap that we weren’t going to enforce anyway?

We made it easy for partners to work with us. We did that by paying our sales teams the same whether we sold the product directly or through our channel. So there was incentive to love and leverage the partners.

We were easy to listen to. Our sales reps were technical and really enjoyed diving into the product. So in presentations we typically ditched all the marketing BS and got right to the techie goodness inside. Audiences loved this, it felt more like education than being sold to. And it made them much more likely to invite us to present up their management chain. 

But, I can’t tell you if this easiness was our strategy because I don’t even know, for sure, what strategy is. There are so many definitions that it gets kind of mind numbing. 

Which is why I’m going to spend the next several posts trying to figure it all out. Using the Powersoft story as an example, I'm going to try to nail down a definition of strategy. And, more importantly, I'm going to try to figure out whether strategy even matters to a small business. 

Heading in I’ll admit I’m a bit of a strategy cynic. Especially when I read quotes like this from management guru Peter Drucker.

"Strategy is a commodity, execution is an art."

THE STRATEGY SERIES

To frame our discussion I’m going to use the work of Michael Porter - the undisputed Michael Jordan of strategy. You can’t cover the topic without beginning and ending with his work. 

But, Porter’s writing is a little hard to consume, so we’re going to use an interpreter. A lady by the name of Joan Magretta. She’s worked with Porter and, with his cooperation, authored the book Understanding Michael Porter: The Essential Guide to Competition and Strategy. So we’re going to tear through her book and try to find some value in the concept of strategy.

THE MAP

(This site is all about building a Map that will help me do work and life better. So at the end of each post I check in to see if any changes / insights come to mind.)

I introduced the idea of strategy as part of my Self IF back in post #27. At that time I said I’d hit strategy harder when I got to my Work Map, but I lied. When I finally got to my Work IF, in post #53, I completely ignored strategy. Not on purpose. It just didn’t jump to mind. Probably because I knew I still had no clue what it even was. So now it’s time to fill that gap. It’s time to decide whether strategy has a place on my Map and in my small business.

***NOTE: I've added a new section to the website titled SPEAKING. Here you'll find brief examples of my public speaking, and information on how to get hold of me if you're looking for a speaker.