Five Forces vs. The Customer?

You may have seen the reports of Monitor Group's recent demise. Steve Denning of Forbes wrote a forceful blog post entitled, "What Killed Michael Porter's Monitor Group? The One Force That Really Mattered." This article has been the basis of a lot of bandwagon jumping lately. Not in a good way in my view.

I like strong opinions. As such, I like the Denning piece. But as a skeptical consumer of information, I'm not convinced that the conclusions he's drawn are correct.

Are we to believe the very approach that Porter and Monitor were famous for was exactly what lead to their demise? It may be a poetic and clever assertion, but I don't buy it for a second. You'd also have to forgive me for questioning the motive of the article itself, since Denning is clearly a management consultant. It feels a tad righteous and self-promotional as well.

But that's not my real beef with the article.

I take umbrage with anyone who thinks they can stand back from a safe distance and accurately assess why a particular business succeeded or failed. Looking retrospectively at any event, whether it is a game of schoolyard basketball or the management of a multinational, is incredibly problematic. Suggesting you have the definitive viewpoint is just plain fatuous.

There are thousands of moving pieces, decisions, people and contributing and conflicting influences that we could never appreciate or comprehend. Even if we are intimately involved in the enterprise we still don't know the totality of things that were going on around us. If you’ve ever worked in a dissolving business you’ll know what I’m talking about. Everyone on the outside has an “expert” opinion as to why the company failed. And yet, I doubt any of them are fully correct.

Just as the validity of predictive forecasting is suspect, so is the validity of retrospective analysis of business failure. It would be nice if things were as cut and dried as some would have us believe.

“When the number of factors coming into play in a phenomenological complex is too large scientific method in most cases fails. One need only think of the weather, in which case the prediction even for a few days ahead is impossible.”
― Albert Einstein

“The cord that tethers ability to success is both loose and elastic. It is easy to see fine qualities in successful books or to see unpublished manuscripts, inexpensive vodkas, or people struggling in any field as somehow lacking. It is easy to believe that ideas that worked were good ideas, that plans that succeeded were well designed, and that ideas and plans that did not were ill conceived. And it is easy to make heroes out of the most successful and to glance with disdain at the least. But ability does not guarantee achievement, nor is achievement proportional to ability. And so it is important to always keep in mind the other term in the equation—the role of chance…What I’ve learned, above all, is to keep marching forward because the best news is that since chance does play a role, one important factor in success is under our control: the number of at bats, the number of chances taken, the number of opportunities seized.”
Leonard Mlodinow, The Drunkard's Walk: How Randomness Rules Our Lives

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