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Michael Porter of the Harvard Business School is pictured in this file photo taken on on May 1, 2001. (Tibor Kolley/GLOBE AND MAIL)
Michael Porter of the Harvard Business School is pictured in this file photo taken on on May 1, 2001. (Tibor Kolley/GLOBE AND MAIL)

Harvard academic has a long view on competitiveness Add to ...



Michael Porter looks and behaves like a corporate titan as much as an academic. This is not unusual; the wisdom of top business professors is now tapped almost as frequently by companies and governments as it is by students. But the wisdom of Harvard’s Prof. Porter is the highest-octane fuel available.

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Like many leading executives, the Bishop William Lawrence University Professor is used to being listened to. His staff refer to him as “Professor Porter.” He wears a suit and tie, and our photographer receives instruction that this is the kind of assignment that requires smart casual or business attire at a minimum. And he is busy. Very busy. Earlier in the day of our interview, he was at a board meeting of one of two companies where he is a director. And he must leave to catch a flight in 55 minutes precisely.

If this were not daunting enough, the interview takes place in the Institute for Strategy and Competitiveness. The neo-Georgian town house on the Harvard Business School campus, its pilastered entrance newly covered in gleaming copper, is, according to his official biography, “dedicated to furthering Prof. Porter’s work.”

In the room where we meet, there is a picture of his two daughters on the mantelpiece. The institute’s bookshelves, meanwhile, are filled with multiple editions of his 19 books and the walls adorned with his diplomas, certificates and decorations.

Prof. Porter’s reputation has put him near the centre of discussions with both chief executives and politicians about how to restore U.S. growth and prosperity. Sitting down at his own boardroom table, with a look that brooks no small talk, he blames the depressed state of the economy in part on cyclical factors – retrenchment after the real estate bubble, corporate boards’ caution about domestic investment – and in part on “a more fundamental competitiveness problem.”

It is predictable that competitiveness is the lens through which Prof. Porter sees the problem. At the root of his success was his first article in Harvard Business Review, more than 30 years ago, which outlined the “five basic forces” that determine the state of competition in any industry (customers, suppliers, potential new entrants, substitute products and the underlying rivalry between direct competitors). Companies – and subsequently countries – found it a simple and useful way to assess their own strengths and weaknesses, and plot forays into new markets.

It still animates Prof. Porter, whose steady, high-velocity delivery is punctuated by a mime artist’s repertoire of hand gestures (sewing a button, screwing up a jar, chopping a carrot). He points out that globalization has benefited higher-income, higher-skilled people like him. So, having started his career giving speeches on strategy and competitiveness in the U.S., he now gets invited all over the world. “The market for me has increased exponentially,” he says, “because all these countries are looking for talent.”

Lower- and middle-income workers, however, have suffered. “We’ve let all kinds of obstacles fall in the way of the U.S. as an effective and efficient and productive place to do business,” he says, citing skill gaps, poor infrastructure, and the burdens of health benefits, regulation and litigation. At the same time, “other countries have offered a better value proposition.”

While Prof. Porter retains an underlying optimism, this loss of competitiveness obviously pains him. “This is shocking for the U.S. If you go back 100 years, you find that the U.S. really was a huge pioneer in public education … The U.S. was a real pioneer in creating a national, very deep university system … The U.S. was a pioneer in the interstate highway system … We stepped to the plate in the past and made very, very bold investments in the fundamental environment for competitiveness. But right now, we can’t seem to agree on any of these things.”

The financial and economic crisis also sparked a bonfire of many of the widely accepted academic orthodoxies on which the developed world’s prosperity was built. Has it shaken his faith in his theories?

Not a bit. Prof. Porter says his five forces are, if anything, “more and more and more fundamentally important and visible, because a lot of the barriers and the distortions that would blunt or mitigate these forces and the need for strategy and competitive advantage … have been swept away” by globalization, the increased velocity and transparency of information, and the decline in trade barriers.

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