Business strategy—or in other words, how do you get a bunch of people to work together to make as much money as possible? Back in the day, like a hundred years ago, companies (or groups of people) originally formed because it was more efficient to have them working together than it was to have them transact in the open market.
Basically, the costs of engaging were higher externally than they were when everyone was working together in the same place, under the same control, within the same artificial boundaries of the corporation. Everyone working together under one roof in an enormous typing pool, on a meandering assembly line or at Yahoo….sorry couldn't resist that.
The modern incarnation of the capitalist corporation was formed because it was a more productive way to gather, arrange and deploy the labor resource of the worker, until now.
Business Strategy Tools
But that's not really business strategy. Michael Porter famed business guru and Harvard sensei, says "competitive strategy is about being different" (November-December 1996, "What is Strategy" Michael E. Porter, Harvard Business Review). He goes on to explain "It means deliberately choosing a different set of activities to deliver a unique mix of value." So it's not just getting the people together in an efficient way, it's about what you have the people do, and how you have them do it once you've gathered them, that defines your competitive strategy.
And it better be "unique" in Porter's parlance, because if it's not, you probably don't really have a competitive strategy. The point of competitive strategy to him, and I agree, is to earn greater relative profits than your competitors. This is how the market rewards how valuable your offering is, by paying you more for it or by you having an ability to deliver it more productively than others—Porter 101, pretty straight forward. However, if you are like everyone else, your run of the mill bottom line proves it, and you are basically waiting for someone to come along and make you irrelevant, and they will.
This is where business strategy and social collide, not around Facebook, but around Michael Porter's concepts of being unique. Here's why. For the last one hundred years business has been insanely focused on ever increasing levels of productivity in response to the rapid expansion of the worldwide economy. Build it, and they will buy it. Build it more and more efficiently, and you'll be able to maintain or even grow profits. Business management has been wildly successful at this—it's been able to produce or deliver pretty much anything and everything efficiently and at scale.
Social Technology Makes You Unique, By Definition
Except now, the market driven expansion and growth is slowing (ending?) and commodity offerings abound—business is one big knock-off after another. But something else has also happened, and it's all around us in today's social technology. Mobile smart devices, new software services, enabling internet and cloud infrastructures and bandwidth advancements have all arrived somewhat together.
These innovations are tools that change business strategy because they change the way you connect, communicate, collaborate and create and sustain community with your markets—all of them—your customers, employees, investors and business partners. These tools offer an unprecedented level of immediacy and intimacy that business has never had to deal with before. Engaging with your markets, even defining your markets, changes because of the spatial and temporal relevancy and network effects enabled by these tools.
Business Strategy And Social Collide Around Being Unique
These tools have created a data and relevancy explosion that is shifting competitive strategy from production efficiency to information supply and being unique in real time. Interpreting and engaging with markets in real time, is the new platform for competitive strategy. The experience you create and deliver through these devices will define your unique offering. Porter's mandate of being unique is enabled by these tools, your profitability is dependent upon them.
Want to be unique and earn superior profits? Then use these tools to change the way that you work, engage and deliver your offering to your customers and engage with your employees, investors and partners. Michael Porter will be proud of you.