During the Advanced Management and Leadership Programme – the flagship program of Said Business School for senior executives at Oxford University – Professor Thomas Powell is explaining the concept of “productivity frontier” as an approach for strategy development.
Two seats beside me, my dear friend, the Nigerian Billionaire Dr. Jimoh Ibrahim, is sitting. He is participating the program as a student. An experienced and highly successful business leader. Educated in Harvard and heading a conglomerate of multiple companies employing 21.000 people. I hear him saying: „This is not true! I do not agree!“ Some others raise their hands and express their view and their resentments on the methodology. The discussion on strategy of the group of 35 senior managers is unleashed …
And within a couple of minutes it became very clear: There is hardly any economic field where a bigger gap between theory (academics) and practice (managers) is existing than within the field of strategy.
After some intense discussion the group could agree on a definition of strategy: Strategy is the discipline of achieving superior and sustaining performance.
To get a better understanding on the matter we should define what superior performance means. Some could say it’s about profit or growth. Some others will consider profitability or share-value as the main indicator. It’s a matter of taste but I personally prefer the approach of my great teacher Professor Marc Bertoneche who explains:
„A good manager is selling a lot of products. You are a very good manager if you not just sell a lot of products but if you make a good profit. And you’ll be an excellent manager if you sell a lot of product with a good profit and a lot of cash.“
At the end of the day you can measure any company’s performance on the cash it is producing. That’s what its stakeholders are expecting and what makes the company prosper and defines its share-value.
Ergo: „Superior perfomance means finding ways to produce a strong and steady cash flow at a good profit!“
Along this thin red line I am trying walk when lying down my thoughts on strategy on the following pages …
Read the full Article: The6thForce
Read the Press Release of University of Applied Science: The Art of Superior Performance