Thursday, September 17, 2009

Michael Porter Is Over The Hill

I regretfully sat through too much of Harvard professor Michael Porter's visit on CNBC this morning.

If Porter isn't emeritus yet, he should be. If that.

I have never actually held Porter in very high regard. The 'competitive strategy' books for which he became known in the late 1970s were, in fact, merely rehashed microeconomics, with generous dashes of findings from the Strategic Planning Institute's PIMS database. Friends of mine from that organization related that Porter had spent months over at their shop, due to its historic tie to Harvard Business School, using their then-current and copious business-unit level database.

Now, with time and thinning hair, Porter is introduced as a 'competitive strategy expert.'

On what basis, I still ask? His books provided no new information. To my knowledge, no one ever hired Mike as a VP of competitive strategy, and then announced some heretofore unachieved total returns over time. Or share gains. Profit. Etc.

You get the idea.

This morning, Mike launched into now-typical accusations against and descriptions of the US medical/health insurance sector, with nary a statistic nor fact within sight.

He began by declaring various European countries to have 'superior' health care systems, and ours to be of inferior 'quality.' Then he held forth on the inadequacy of US health care distribution and lack of universal coverage, declaring those to be worth rating US medical care as subpar.

Apparently, I wasn't the only viewer who had misgivings about Mike's rather loose and cavalier manner of evaluating the US health care sector.

About fifteen minutes later, co-anchor Joe Kernen, in response to many emails which had flooded the program in that time period, asked Porter to clarify his earlier comments.

At which point Porter backtracked, suddenly declaring that, for serious illness, US medicine was, and is, in fact, on a par with, if not superior to that of other countries. He then sharpened his criticism to that of 'delivery' and 'coverage.'

Well, that's fair. But he's not known as a medical care delivery and coverage expert. And Mike provided not a shred of comprehensive, non-anecdotal evidence to support any of his statements this morning. And his little intellectual two-step made him look old, doddering and unable to communicate his thoughts. If he even clearly understood them himself, in the first place.

They may as well have had him on to opine about financial regulation or energy policy. Neither of which is he known for having studied, either.

In fact, it was extremely disappointing to see the program's anchors completely avoid asking Mike some questions that would have taxed his supposed expertise.

For example:

-Given your years studying industry structure, Mike, what do you think is the most likely competitive structure of the health care sector, consistent with sustainable profitability and competitive total returns?

-How do you think some of the proposed new regulations will alter what would be, in their absence, an optimal, terminal competitive industry structure in this sector?

-What do you think of current expense and profitability levels in the health care sector, as compared with; other US economic sectors, long run sustainable profit levels, global comparables.

-How would eliminating or relaxing policy mandates, and allowing inter-state health insurance competition, affect competitive structure, profits, total returns, and overall performance in the sector?

-If the government eviscerates profit in this sector, either through regulation, and/or a government-owned competitor, how do you envision that type of 'competition' comparing with competition from relaxing interstate marketing and policy mandates?

I'd have really appreciated hearing Porter's thoughts on those topics. Sadly, nobody thought to have prepared such a list to ask him. What a waste.

The guy has one alleged speciality, competitive structure analysis, and the CNBC co-anchors and staff couldn't even be bothered to tap it in an intelligent fashion while Porter spent about half an hour on the set.


Anonymous said...

Funny - Prof. Porter has a chair at HBS and gets invited onto programs like CNBC, while such a brilliant mind as yours is relegated to some anonymous blog where you recite your profound ignorance of his work. Hired as a VP of strategy? No, simply retained by the government of Saudi Arabia, Nigeria, New Zealand, Canada, Sweden - the list is longer than I care to type - to advise on competition, strategy and health care. Google's web crawler isn't a perfect thing; it turns up drivel like your blog.

C Neul said...


Let's see, where to start with your anger-filled comment?

First, you are anonymous. I don't see you noting your successes.

My blog writing led to an appearance on the #1 cable news show. How are you doing on that score?

CNBC's audience numbers are lower than Fox's.

Michael Porter is an aged Harvard faculty member. He's a safe hire for LDCs who want a western academic name. I suppose that, prior to last year, or years prior, you would have lauded Ken Thompson, Dick Fuld, Stan O’Neal and John Thain for being sitting CEOs. Never mind each contributed to his firm’s ultimate demise.

I learned long ago that position and rank don’t equate with genuine accomplishment, or, often, even intellect.

I didn't notice you citing the quantitative performance improvements in Nigeria, Saudi Arabia, NZ, Canada, or Sweden, thanks to Porter's 'work.'

You offer no criticism of my pointed comments on Porter's CNBC appearance. Either you agreed with my post, or you're unable to come up with any basis for disagreement. I stand by everything I wrote in that post. Your baseless, angry whining hasn't changed a thing.

Writing this blog isn't my main business. And it doesn't seem to be anonymous at all. You'd be shocked at some of the daily hit #s and linked/copied posts I've had.

Sounds to me like this is a case of those who can't, mock and criticize.

Must suck to be you.