Social Entrepreneurship by the Billions

An audacious effort to provide digital ID numbers throughout India illustrates the potential for large-scale change.

The 3 Simple Rules of Managing Top Talent

During my 15 years of managing talent as dean of the Rotman School of Management, and previously as cohead of Monitor, I have managed some of the best and brightest in professorial talent and the strategy consulting industry worldwide. Over this combined quarter-century of experience, I developed three rules for managing top-end talent.

Roger L. Martin

Even experts can be blind to important features of their subjects. I have done a lot of work on country competitiveness, but if anybody had asked me in 2000 to name the top 100 conditions that underpin a thriving economy, I wouldn’t have mentioned “a well-functioning land registry system.” Then I read [Hernando] de Soto’s compelling case that the ability to get clear title to … [ Read more ]

Roger L. Martin

Do a little test of your strategy before committing to it. Ask: Is the opposite stupid on its face? Have most of my competitors made the same choice as me? If the answers are “yes,” you have more work to do to have a smart strategy rather than just a non-stupid one.

Roger L. Martin

Anyone taking the time to delve into the literature of strategy quickly realizes that there are two fiercely opposed camps.

In the red corner we have the “positioning school” (TPS) and in the white we have the “resource-based view of the firm” (RBV). Michael Porter is credited with (or more often accused of) creating TPS in 1980—positing that a firm should think about positioning itself in … [ Read more ]

Roger Martin

Strategy is not the inevitable outcome of a process of analysis: it is a choice of where a firm wants to play and how it will win there going forward. Yes, a working knowledge of the industry and its likely evolution, the customers and their likely preferences, the firm itself and its potential capabilities and cost structure, and its competitors and their likely responses and … [ Read more ]

Strategy Is About Both Resources and Positioning

Anyone taking the time to delve into the literature of strategy quickly realizes that there are two fiercely opposed camps.

In the red corner we have the “positioning school” (TPS) and in the white we have the “resource-based view of the firm” (RBV). Michael Porter is credited with (or more often accused of) creating TPS in 1980—positing that a firm should think about positioning itself in … [ Read more ]

There Are Still Only Two Ways to Compete

Back in the early 1960s, the great Boston Consulting Group founder and strategy theorist Bruce Henderson asserted that there was only one way to successfully compete: gain a relative market share advantage over all competitors so as to have lower costs than all of them. The payoff is that it puts the firm in a position to drive those relative costs even lower as competition … [ Read more ]

Roger Martin

An economist falls apart and turns into a blubbing puddle on the floor if you take away the concept of trade-offs because they all started in the same place: the societal trade-off between guns and butter. Trade-offs are a sacred article of faith for economists. You simply can’t be an economist if you don’t consider trade-offs to be a central feature of your worldview.

Playing to Win: How Strategy Really Works

Playing to Win, a noted Wall Street Journal and Washington Post bestseller, outlines the strategic approach Lafley, in close partnership with strategic adviser Roger Martin, used to double P&G’s sales, quadruple its profits, and increase its market value by more than $100 billion when Lafley was first CEO (he led the company from 2000 to 2009). The book shows leaders in any type of organization … [ Read more ]

How to Win the Argument with Milton Friedman

In 1970, in his famous essay, The Social Responsibility of Business is to Increase its Profits, Milton Friedman railed against any corporate attempt to promote “desirable social ends” which he argued were “highly subversive to the capitalist system.”

Ever since, folks have argued that Friedman is wrong to make the trade-off between shareholders and the rest of society so wholly in favor of shareholders and that … [ Read more ]

Strategy in a World of Constant Change

Advantage is neither transitory nor immortal. Hence, strategy is not an either-or exercise about seeking flexibility OR sustainability. It is about both: seeking sustainable competitive advantage in a world full of far-reaching and tumultuous change.

Roger Martin

Real competitive advantage is enormously long-lived. …To be sure, first mover advantages can vaporize quickly, but not all first mover advantages are backed by a real competitive advantage. So if I hear the demise of MySpace cited once more as evidence that competitive advantage has become more transient, I will puke. All it proves is the basic rule of business: that which can be … [ Read more ]

A.G. Lafley and Roger Martin

In our view, leaders would do well to take a more systematic approach to developing their decision-making capabilities. The place to start is… with intellectual integrity. In common usage, the word integrity means honorable or virtuous behavior. For our purposes, though, we draw a distinction between exhibiting honorable behavior (moral integrity) and exhibiting discipline, clarity, and consistency so that all of one’s decisions fit together … [ Read more ]

The Wrong Incentive: Executives Taking Stock Will Behave Like Athletes Placing Bets

In football, there is a rigid separation of the real market — the games played on Sundays — from the expectations market, or the betting that takes place prior to the game. No participant in the real market is permitted to participate in any way in the expectations market. If they do, they risk a lifetime ban for even one infraction. There is an even … [ Read more ]

Roger Martin

In football, there is a rigid separation of the real market — the games played on Sundays — from the expectations market, or the betting that takes place prior to the game. No participant in the real market is permitted to participate in any way in the expectations market. If they do, they risk a lifetime ban for even one infraction. There is an even … [ Read more ]

Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL

American capitalism is in dire straits, caught in a perilous pattern of increasing volatility, decreasing investor returns, and ongoing bad behavior by executives. And it’s getting worse. Since the turn of the twenty-first century, we’ve seen two massive value-destroying market meltdowns and a string of ethics breaches, including accounting scandals, options-backdating schemes, and the subprime mortgage debacle.

Just what is going on here? Is it the … [ Read more ]

David K. Hurst, Roger L. Martin

Agency theory, derived from neoclassical economics, together with the gospel of shareholder value, has led to managers being compensated for doing the wrong things. Stock-based compensation, for example, focuses executives on expectations markets rather than real markets, where customer value is created. It is this focus on maximizing what should be an ancillary goal that has led to the marginalizing of customers as “marks” to … [ Read more ]

Roger Martin and Chris Argyris

Really smart people have the hardest time learning. They are so very smart that they are also very “brittle.” When something goes wrong, rather than reflect on what they might have done to contribute to the error, they look entirely outside themselves for the causes and blame outside forces — irrational clients, impossible time pressure, lack of adequate resources, shifts beyond their control. Rather than … [ Read more ]

The Trouble with Directors

Neither inside nor outside directors can adequately represent shareholder interests.