Roger Martin, Michael Porter, and Re-imagining the Production Possibility Frontier

Michael Porter, in “On Competition”, appears to emphasize the importance of trade-offs.

Roger Martin, in “The Opposable Mind”, appears to de-emphasize the importance trade-offs.

Porter defines strategy is the process of making choices about activities that results in sustainable competitive advantage. Both books make reference to activity diagrams – so there’s unity and acknowledgement that choice matters. At the core: Porter explains the ‘why’ of strategic decision making, and Roger Martin describes the ‘how’ of strategic decision making. The ultimate way of showing trade-offs, in my view, is though the Production Possibility Frontier.

What is very elegant about the production possibility frontier (PPF) is that it’s two dimensional and tells a very clear story. There are trade offs between quality and quantity. Luxury and Economy. Bread and Guns. Reporting and Analysis. Accuracy and Precision. Very easy to understand.

Simplicity wins when you’re communicating. And yet, we’re rarely handed a manual when it comes to seeking elegant solutions.

Instead of just plotting two trade-offs and calling it a day, and instead of heading into n-space and Riemann spheres and unicorns and stickers – there is an elegant way of increasing salience while retaining understability.

If you use GGOBI or PASW, you can select ‘scatterplot matrix’ and you’ll get a n x n chart of all the activity-relationships. So, if you have 10 activities with tradeoffs and functions interrelating them, you’ll get a 100 charts, of which, 45 will be of use. (45 are just the mirror image, and 10 are straight line functions).

Through the magic of the post-it note, you can expand the number of activities under consideration quite a bit, and then start sorting them out on a very large wall.

What you might end up finding are a number of strategies that are very close any number of PPF curves (at least, the ones that matter). From there you can derive activity maps that correspond to any number of selected PPF curves. The elegant solution would be plot it against a single PPF curve, but I’m pessimistic (at this point) that such a solution would be common enough.

Instead of a single PPF, what if  it’s more of a Library of PPF’s?