Customer Reviews

The PIMS Principle: Linking Strategy to Performance

5 star:		(2)
4 star:		(1)
3 star:		(1)
2 star:		(0)
1 star:		(0)

 

 

No strategist should be without The PIMS Principles in their library. I have used it in numerous consulting engagements and found it to be a source of wisdom that trancends the current management fad-of-the-day. PIMS Principles explains all of the recent fads typical of the corporate boardroom in a logical, empirical way. Topics that every strategist should balance but don't include relative market share, relative product quality, relative productivity, and investment intensity. Authors of current books on stragegic planning such as Gary Hammel recognize that PIMS put stragegic planning on the map. Even Tom Peters agrees that the PIMS team has created one of the most powerful knowledge bases ever assembled.

I believe The PIMS Principles outlines in a disciplined way the factors needed for any balanced scorecard effort and in fact could be considered the "first balanced scorecard" which was used at General Electric in the 60's and 70's.

General Electri! ! c's success as one of the most diversified and highly successful value creators is and can be attributed to their ability to balance the factors identified in The PIMS Principles.

A must read for anybody really interested in corporate strategy and why fads and simplified approaches rarely work.

The Profit Impacts of Marketing Strategies (PIMS) Study grew out of a quest for general principles of strategy. The study itself began in 1972 and collected data on over 3,000 business units in 450 corporations for periods ranging from two years to over a decade.

Even twenty years after its original publication, there isn't anything quite like it. Because of the way the material is presented, you can analyze different factors operating to see how they might affect your business. You can look at Picking Profitable Markets or the Impact of Market Position on Profitability or Why Quality is the Premier Driver of Profitability and then relate the principles to your own operation.

You can do this by reading the book all the way through from front to back, or by dipping into the chapters that seem to offer you help for a current problem. If you're I doubt about where to start, let me suggest Why Quality is the Premier Driver of Profitability. It's a chapter I ask my clients to read when we're working on strategy.

A lot of the material in this book is timeless. You'll find data and recommendations that are just as valuable today as when the book was published and that will be valuable ten years from now.

There are problems, though. While some of the research findings may be timeless, the book is still a product of its time. You'll find discussions of "Portfolio Planning" methods, which were in vogue at the time the book was written. You'll find the authors using language and reacting to issues that will sound somewhat dated. Nevertheless, the solid truth and research support that exists in this book makes it worth buying.

In the 70's when the work was first done, articles appeared in Harvard Business Review and the study then was closely associated with Boston Consulting Group. Much has happened since and the book is just a rewrite of the earlier results. I suggest you get the HBR articles, they cover the material well.

No strategist should be without The PIMS Principles in their library. I have used it in numerous consulting engagements and found it to be a source of wisdom that trancends the current management fad-of-the-day. PIMS Principles explains all of the recent fads typical of the corporate boardroom in a logical, empirical way. Topics that every manager and strategist should balance, but don't, include relative market share, relative product quality, relative productivity, and investment intensity. Authors of current books on stragegic planning such as Gary Hammel recognize that PIMS put stragegic planning on the map. Even Tom Peters agrees that the PIMS team has created one of the most powerful knowledge bases ever assembled.

I believe The PIMS Principles outlines in a disciplined way the factors needed for any balanced scorecard effort and in fact could be considered the "first balanced scorecard" which was used at General Electric in the 60's and 70's.

G! ! eneral Electric's success as one of the most diversified and highly successful value creators is and can be attributed to their ability to balance the factors identified in The PIMS Principles.

A must read for anybody really interested in corporate strategy and why fads and simplified approaches rarely work.