On March 22 we had the privilege to listen to Alberto Levy as part of the PreSABF talks at ITBA. He made a wonderful presentation on the topic of competitive strategy.
Alberto insisted from the beginning that we should try to make this meeting an informal and participative one, eventually turning it into a highly dynamic conversation, bidirectional, with discussions and exchange of ideas and opinions.
The first topic discussed was the strategic assessment model. This model is based on the idea that only a good assessment of the situation will derive in a good diagnosis. He insisted on the ability to think systemically in order to achieve the correct diagnosis. To think systemically means to see the company as a connected system where no part of it can be viewed or analyzed separately, but as a part of a whole. According to Alberto, understanding the “penta model” is another key reason that must be understood to carry out good strategies: it is necessary to analyze all the main ingredients involved in a company including its culture, strategy, market, resources, management and the interrelationship among them. Additionally, we must align every worker’s view of the company because in the presence of cognitive dispersion there can’t be effectiveness. In his work Alberto first helps his customers to understand how they are running their companies by creating the corresponding model and then they can start thinking on a real strategy.
Then he suggested how to think in senior positions. On one hand, he emphasized the importance of humility because, among other things, it helps to understand that a company is not big or small. These are non-permanent states in which you can be at any given time and that state can change in increasingly shorter times. It is also very important to challenge the paradigms we have because that creates a model that we believe it is going to work in the future, something which is usually false. Alberto ensures that the worst enemies of the strategy are the statistics, they are an extrapolation of the continuity of yesterday. In the field of strategy there is no possibility of algorithms, there is no way to understand all the variables involved in the game. In this world we talk about foresight and not about projection, you have to imagine the future with assumptions, and it is very important to know how to forget.
Alberto says that these concepts and models emerged mostly from the theory learned in the army. He took the theory and then adapted it to the companies. He says that he could do that because companies are in constant war with their competitors. “We can not destroy our competition because it is considered a monopoly but you can not make peace because it is an oligopoly.” “Only the paranoid survive.”
At the end of the talk, an unexpected turn of events occurred. Alberto mentioned with a serious tone of voice that everything he said made no sense unless we can understand the transcendental values. He can not believe that the word love is not in the books of management. Only with love, justice – which is what produces love – and understanding, as well as persistence and humility we can think in terms of community to reach the most important value: Nobility. He tells us that we are responsible for promoting the ideas of socialism (not politically speaking) to help ennoble the humanity.
Finally, in a world where competitive advantages are increasingly imitable, the key to a successful company is to know how to implement the strategy to increase long-term capital and short-term profitability. The company that competes solely on its produce prices – without knowing how to look forward with innovation, or without respecting the transcendent values – will be a small company forever.
We feel very grateful for the presence of Dr. Alberto Levy, his humility and his wisdom as well as each one of you who attended this event. In Dr. Levy’s personal blog you can find digital versions of his books and other interesting material.
We remind you that you can always be a part of talks like this, and if you are a student born after January 1, 1986, you can apply to the 8th Edition of the South American Business Forum before May 6th. You can enter the SABF site , where you will find all the necessary information.