Actually, the header should read; ‘How Harvard Professor Saved My Irish business?’ Or to be more precise; ‘The 8 Questions That Michael Porter Asked Me That Saved My Irish Business’. Let me explain; I was a few months into my Master’s Business Degree and surprisingly I still hadn’t come across Professor Michael Porter. Then one Saturday afternoon I was browsing a few scholarly books and for no particular reason I opened Michael Porter’s Competitive Strategy. Before I knew it I had finished reading the first Chapter ‘The Structural Analysis of Industries’ and it struck me that this was no ‘ordinary’ book so, naturally, I couldn’t put it down.
I might add that I wasn’t reading it as a wide eyed business novice. In fact I was probably more of a sceptic than novice, doubtful that business academics could really understand the actual slings and arrows of business practice. I had grown up very involved in my family’s business. I had studied Economics in Trinity College Dublin and Marketing Management at the College of Marketing and Design. I had been a Marketing Manager and Managing Director of three companies and, of course, I had read numerous business guru books. But this book was different; it felt like I was reading a work of real substance written by someone who understood the practical nuances of real business, in the real world.
Consequently, Porter’s theories became a prism through which I automatically viewed business and they are still my default starting-point when evaluating commercial opportunities. Needless to say, my business education and experience now extends far beyond Porter’s book Competitive Strategy, but that Saturday afternoon was memorable because it started me on an enlightened business path.
So, how did the Professor save my business, well, after graduating with my Master’s degree I lectured for a number of years in New Enterprise Development, at Dublin City University, and not surprisingly, I made great use of Porter’s analysis and strategies – his rationale is always empirically robust so it was easy to adapt it to; new, small, and medium sized business scenarios. All was good with my world until a point came when the old adage; ‘those who can, do, and those who can’t, teach’, grew too large in my head and I decided to start my own business.
I identified an opportunity, in the Men’s Giftware market and, ironically, would you believe, I was so eager to get going on my great business idea that all of my business education, including Porter’s Competitive Strategy, went out the window. I guess, subconsciously, I thought that hard work, boundless drive and a good market opportunity would bring success. My impatience, enthusiasm and self-belief took control and I told myself it was the entrepreneurial thing to do, to put my head down and work like a demon to achieve my ambitions.
So, having lost sight of my business objectives, we (my staff and me) redoubled our efforts. I worked long, long, hours and within a year my business was seriously struggling. Just managing the cash-flow became a daily task of survival, not to mention the weekly nightmare of covering the staffs’ wages. Our Bank Manager lost faith in my venture and made it crystal clear that he wanted a new Business Plan, without delay, or he was going to freeze our accounts.
The day to day pressures of running my new business had clouded my judgement to such an extent that I actually cursed the bank manager’s heartlessness. But he was, in fact, the catalyst I needed to walk away from the daily slings and arrows and to focus my mind on devising a competitive strategy that would put my business on a cash positive and profitable path.
I talked to Porter, in my mind, and as we walked Dollymount strand ‘together’ he said, ‘let’s go back to the drawing board and answer a few basic questions;
At the end of our ‘chat’ my mind was buzzing with knowledge. He ‘told’ me I should follow a Focused Differentiation Strategy and that I mustn’t waiver from the path, regardless of short term gains or losses.
The following day I wrote and immediately began implementing a new Strategic Plan. Amazingly, within 6 months our cash-flow ceased to be a daily concern and within 12 months the company was well on its way to making 6 digit profits. Hence, I can say, without equivocation, Michael Porter, the distinguished Harvard Professor, saved my business with just 8 basic questions. Thanks a million Michael!
6 years later I decided to sell the company by trade-sale and successfully exited the business, leaving behind a well-positioned and profitable company. I then pursued other business ventures and other opportunities.
To conclude; Jan 2018 is the 10th anniversary of the sale of that business and I thought I’d like to mark the occasion by sharing my experience with our clients and other SME’s. Unfortunately, I can’t say that there is a moral to my Harvard Professor story however I can tell you the practical lessons I learned by stepping back and applying tried and tested best business practice:
For those readers who don’t know me, I currently own a business consultancy firm F. A. FITZPATRICK & ASSOCIATES where we offer a suite of services to small and medium sized businesses (employing from 1 to 500 staff, approx.) You are very welcome to visit our site www.fafitzpatrick.ie and if you think we can assist you I’d be delighted to hear from you.