Porter On Destructive Competition: The Bermuda Triangle of Management

Michael Porter, the man who led a generation of MBAs and execs on competition theory, asks why so many managers go so wrong on strategy.

In some ways, it seems that Porter has changed his views on competition to a  more disruptive approach.

"Most strategic errors come from within. Companies do it to themselves." Other points:

• Destructive Competition: The worst error is to compete with your  competition on the same things," which leads to escalation and price wars
• There is no best approach for a company or its processes
• Strategy (what makes a company unique) should not be confused with goals (market share, tech leadership, industry consolidation, share price,  etc.)
• Strategy should not be confused with actions (mergers, outsourcing, cost-cutting etc)
• Missions statements are no substitute for strategy
• Flakey metrics of profitability, often served up to please Wall Street, end up confusing managers on their own strategy and tasks.

Porter says this last point is the most important and he calls it The Bermuda Triangle of corporate strategy.  Many corporation suffer from failing to distinguish that a high share price is a result of a well-run business, but is not a valid goal or strategy itself. The only path to a good business is actually serving unique customers with unique products to achieve superior financial results.

**Other Views**

FastCompany has an interview with Porter from 2001 when he challenged some precepts of the tech era.

New Paradigm CEO and author Don Tapscott said Michael Porter was wrong about the Internet in this article from Strategy + Business magazine back in 2001. (See Don Tapscott's new book Wikinomics and reviews.)

Financial Post: Vonage More Destructive than Disruptive (pdf)

CEO Guide to the Benefits of Disruption (pdf) and other tools for managing disruption at The Disruption Group's site.