what is strategy.docx

7/25/2019 What is Strategy.docx

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''Summary of What is strategy''

Submitted toProf.Bijaya K.C

Course Instructor

International Strategic Management

Submitted by

Pradipta Kafle

anuarry !th" #$%&

South sian Institute of Management

Kathmandu


2/21

What is Strategy? (Summary)

(he definition of strategy no)adays is different to )hat it used to be. Positioning is too static *

no)adays" any competiti+e ad+antage is temporary as competitors can copy it ,uite easily. (he

article aims at redefining strategy by separating the term from operational effecti+eness. Porterargues that positioning is still a notable )ay to shape ad+antages )ithin a company and sees

hypercompetition as rather odd concept to e-plain shifting patterns in competition and points out

that a misunderstanding e-ists to distinguish bet)een operational effecti+eness and strategy. (he

replacement of strategy by socalled management tools has been responsible )hy many firms

ha+e increased operational effecti+eness but ha+e been unable to translate those impro+ements

into +alues for customer )here profit can be earned and profitability be increased.

/perational effecti+eness 0/12 means performing similar acti+ities better than ri+als. Bettermeans more efficient" faster" and cheaper. It is necessary to achie+e superior profitability.

3o)e+er" )hile /1 is necessary" it is not sufficient. It is not a strategy. company needs to

establish a difference that it can preser+e. 4ifferences in profitability compared )ith competitors

arises because of acti+ities chosen in order to deli+er customer +alue. (hose can be either that

similar acti+ities are combined on a much lo)er cost base 0unit cost2 or the a+erage unit price is

higher due to superior percei+ed +alue.

Strategy is about being different. 4ifferent in a )ay of choosing a different mi- of acti+ities to

pro+ide a product or ser+ice. Strategic positions can emerge from three distinct sources )hich

ser+e as a basis for positioning5

%. Variety-based positioning: company can speciali6e in a subset of an industry7s product

0e.g. sell chairs only2

#. Needs-based positioning: company can try to ser+e more needs of a target group than

ri+als 0e.g. not only sell chairs but furniture for the )hole apartment2

8. Access-based positioning: company can segment customers )ho are accessible in

different )ays 0e.g. only sell chairs in big cities" or +ia the internet2.

sustainable strategic position re,uires tradeoffs. (radeoffs become necessary )hen t)o

acti+ities are incompatible 0e.g. selling lo)cost chairs )hile offering indi+idual customer


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ser+ice2. Companies ha+e to ma9e sure that their acti+ities are coherent. (his implies refraining

from certain acti+ities. Strategy is about choosing )hat not to do.

nother important aspect is ho) a company combines acti+ities. By creating a fit among

acti+ities" imitators cannot copy the business model as easy anymore. (he three types of fit aresimple consistency 0e.g. e+erything is lo)cost2: reinforcement 0e.g. specific mar9eting

strategies2: and optimi6ation effect.

s )e can see" strength of a company can result from a combination of acti+ities. We can thin9 of

themes 0e.g. lo)cost2" )hich span across acti+ities. Strategic fit is fundamental not only to the

competiti+e ad+antage" but also to the sustainability of that ad+antage.

(he biggest threat to strategy is the desire to gro). (radeoffs set by the strategy seem to limit

gro)th. (rying to compete at numerous le+els at once create confusion and undermine

organi6ational moti+ation and focus. (he solution is to gro) by deepening the strategic position.

(his means ma9ing the acti+ities e+en more distincti+e" strengthening fit" and communicating the

strategy to ne) customers.


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Porter argues that positioning is still a notable )ay to shape ad+antages )ithin a company and

sees hypercompetition as rather odd concept to e-plain shifting patterns in competition and points

out that a misunderstanding e-ists to distinguish bet)een operational effecti+eness and strategy.

(he replacement of strategy by socalled management tools has been responsible )hy many firms

ha+e increased operational effecti+eness but ha+e been unable to translate those impro+ements

into +alues for customer )here profit can be earned and profitability be increased.

4ifferences in profitability compared )ith competitors arises because of acti+ities chosen in order

to deli+er customer +alue. (hose can be either that similar acti+ities are combined on a much

lo)er cost base 0unit cost2 or the a+erage unit price is higher due to superior percei+ed +alue.

Operational effectiveness is not strategy

Porter refers to operational effecti+eness 0/12 as the means of performing similar acti+ities better

than ri+als and strategic positioning as the means to perform acti+ities in a different )ay. 3e uses

the apanese manufacturing during the %;


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costbase therefore the strategic decision of those firms )as to go a broad and compete outside of

apan )here operational effecti+eness seemed to be a strategic ad+antage.

3e borro)ed a concept from economics 0possible production frontier2 to introduce )hat he called

producti+ity frontier to sho) a frontier cur+e for a ma-imum possible producti+ity 0+alue2 on aselected process. (he combination of used methods 0acti+ities2 )ith inputs allo)s to assign cost

factors to demonstrate a companies relati+e producti+ity position. Based on a company7s input

and its used methods the cost factor can be compared )ith other best practices and indicate their

operational effecti+eness.

(he pure reliance on operational effecti+eness as strategy replacement )or9s only as long

competitors not employing to same process and impro+ements but as soon those best practices

are made common )ithin the industry" operational effecti+eness becomes mutual destructi+e and

counterproducti+e )ith imitations and homogeneity as end result.

Strategy rest on unique activities

Porter di+ides bet)een +arietybased positioning"needsbased positioningand accessbased

positioning. 3e defines +arietybased positioning as a selection process )here products are

selected due to superior +alue chain optimi6ation that produces a speciali6ed product )ithin an

industry segment. Its reliable performance and consistency ma9es it a subset of choices for

customers to full fill a sufficient need.

Ser+ing all needs on a particular customer segment" is named by Porter as needsbased

positioning )ith a customer in mind that )ants to reduce search cost and loo9s for a solution

from one pro+ider )ith tailoring ser+ice.

(hus building a platform of acti+ities that can deli+er solutions for +arious needs and at the same

time can be differentiated from competitors is +ital to ser+e as competiti+e ad+antages.

Strategy is about finding a uni,ue position by combining a uni,ue set of acti+ities

A Sustainable strategic position requires trade-offs

Porter argues that only the optimal 0right2 mi- of acti+ities is responsible to maintain sustainable

ad+antages and this optimum comes )ith tradeoff7s that )ill not allo) e+ery company to

participate fully. (his implies that a company should 9no) its limits and that it should 9no) that


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certain sacrifices can not be made )ithout putting other acti+ities behind. (hose tradeoff7s occur

)hen acti+ities are incompatible=Porter %;;&5& and might come from missing s9ills" heritage"

inoperable change management etc..

Imitators are by far the biggest threat for a company7s position" to protect one7s position choicesha+e to be made" barriers to be raised to ensure their are not easily to o+ercome. Barriers such as

image" technology or intellectual property can help to protect but they need constant re+ie) in

terms of diffusion and adoption and operational effecti+eness can be e-cluded as potential barrier

since diffusion rate is far to high to be a lasting factor.

Benchmar9ing can be used as yardstic9 to see current conditions of the producti+ity frontier

)ithin an industry but rather to see as a tool to imitate and impro+e operational efficiency it

should be used as method to identify acti+ities that can done differently. Benchmar9ing as tool

but not loose sight on de+elopments in terms of industry )ide ,uality impro+ements and

technological ad+ancements.

Continental irlines failed an attempt )ith Continental ?ite to maintain a fullser+ice image

)hile challenging and imitate South)est irlines business concept.@eutrogenaAs rigorous

decision not to alter its image 0research based" medical pro+ed soap2 and maintain a uni,ue

position )ith manufacturing processes that does not uses deodorants or s9in softener" put product

attributes o+er manufacturing efficiency.

Porter7s sees it as ine+itable that choices are made that limit a companies offering" reach and

a+ailability to ensure focused acti+ities by not being e+erything to e+erybody.

Strategy is about choices and about )hat not do.

Fit drives both competitive advantage and sustainability

Porter distinguish three types of fits: simple consistency fit" acti+ities reinforcing fit and

optimi6ation of effort fit. Create consistency among functional acti+ities throughout the company

to ser+e the main strategic goals" an ability to reinforce acti+ities and communication and

optimi6e acti+ities on a constant basis to identify )aste and eliminate redundancy. 3e )arns that

focusing too much on core competence and success factors )ithout ta9en e+ery indi+idual

acti+ity into account can lead to false interpretation of a company7s strength in terms of its

capability and resources. (he reduction on core competencies simplifies the organi6ational +ie)


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but at the same time clouds the understanding of interconnection of +isible and non +isible

functional acti+ities.

nre+ealing those connections" Porter suggests an acti+ity mapping as analytical process to

+isuali6ation and illustration of those interrelation. l)ays )ith the idea in mind that a companyis a chain of acti+ities also 9no)n as +alue chain.

Porter suggest that those interconnections are the heart of any strategy" as those lin9s 0chains2 are

hard to imitate therefore lead to sustainability )hich is an ultimate goal of strategy other)ise it

)ould be just tactical manoeu+re to o+ercome a barrier.

company that focuses on a system of acti+ities as competiti+e barrier rather than indi+idual

selected acti+ities 0technologies" resources" s9ills2 seems more li9ely to sustain and build

competiti+e ad+antages o+er a time.

(echnology" capital or s9ills are important but not e+erything to achie+e competiti+e ad+antage.

Interconnections bet)een assets and its functional e-ecution is as of similar importance. (his

includes the ability on ho) to reach decisions" )hat to communicate etc. all are part of a system

of acti+ities ser+ing a particular goal and mission.

Coordinating and e-ecuting this system of acti+ities is the real strategic capability of any

organi6ation as it re,uires longterm commitment and a positioning that loo9s beyond currents

trends and shortterm goals.Strategy is about finding complementary acti+ities that create an

internal and e-ternal fit.

ediscovering strategy

(he failure to choose a strategic position" the misunderstanding of competition and its related

forces" organi6ational mismanagement" the reliance on technology and the desire to gro)

e-ponentially are e-amples for unsuccessful strategy ma9ing and e-ecution.Best practice and

operational effecti+eness ha+e been seen as substitute and barometer for success and misleading

the direction in building a position that is different from others and )ould ma9e imitation

difficult.


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%. Strategic rame)or9

gro)ing emphasis on strategic leadership and cooperation is e+ident from

Singapore7s early years as a de+eloping country in the %;&$s" to today as an #$%$

ad+anced economy )ith )ellestablished" effecti+e national systems. Key

features include5 )or9force de+elopment as integral to national economic

strategy" )ith ad+ocacy from all sta9eholders +ia tripartite agreement since the %;;$

early %;D$s: e+aluation of economic prospects )as systemati6ed o+er time"

underpinning a highly demandled system based on input from sta9eholders

and a central ad+isory role for business and industry: a piecemeal structure in %;D$

the %;&$s )as restructured to ensure a high le+el of coordination" cooperation"

system alignment and consensus on policy goals: and regular re+ie) to meet

economic demands.

#. System /+ersight

/+ersight impro+ements ha+e occurred to support creation of a high ,uality

)or9force de+elopment system. @otable elements are5 the systematic approach

#$%$

to program de+elopment formulated during the %;


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been created to support )or9force de+elopment although higher le+els of

articulation and creation of ne) path)ays to pro+ide broader lifelong learning %;D$

opportunities are still in de+elopment: and ensuring high standards of pro+ision

and management has been a major concern since the %;


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Executive Summary

Si!!" a" a #river $%r ra&i# ec%'%mic #eve!%&me't i' Si'(a&%re

T)e Si'(a&%re ec%'%my )a" "ee' ra&i# ec%'%mic (r%*t) "i'ce t)e +,-."/ T)e

*%r$%rce

#eve!%&me't 01$D "y"tem )a" 3ee' a3!e t% m%ve e$$ective!y t% #e!iver t)e

"i!!" re4uire# t%

"u&&%rt ec%'%mic re"tructuri'(5 $r%m &rimari!y !a3%r6i'te'"ive i'#u"try

0+,7.6-."5 t)r%u() a 8T)e "y"tem9" m%re ca&ita!6i'te'"ive &)a"e 0+,-."6+,:." a'#5 "i'ce t)e +,,."5 t% a &%!icy

$%cu" %' 3ui!#i'( a e$$ective'e"" i'

'%*!e#(e6i'te'"ive a'# )i()er va!ue6a##e# ec%'%my/ T)e "y"tem9"

e$$ective'e"" i' #e!iveri'( #e!iveri'(

#ema'#6!e# "i!!" )a" 3ee' e'a3!e# 3y t)e c!%"e tri&artite &art'er")i&

3et*ee' (%ver'me't5 #ema'#6!e#

u'i%' a'# "tae)%!#er"5 a'# a c%%r#i'ate# a&&r%ac) *it)i' (%ver'me't/ T)e

*%r$%rce "i!!" )a" 3ee'

#eve!%&me't )a" 3ee' ce'tra! t% meeti'( t)e (%ver'me't9" "trate(ic ec%'%mic

&!a'" a'# c%&i'(

e'a3!e# 3y t)e

*it) curre't a'# $uture c)a'(e i' a )i()!y %&e' ec%'%my/

c!%"e tri&artite

Met)%#%!%(y

&art'er")i&

T)e "tu#y 3e'c)mare# !eve!" %$ "u&&%rt $%r *%r$%rce #eve!%&me't i'

Si'(a&%re a'# i#e'ti$ie# 3et*ee'

mea"ure" t)at )e!&e# t% &r%(re"" *%r$%rce #eve!%&me't *it)i' t)e $rame*%r

%$ )uma' ca&ita! (%ver'me't5

#eve!%&me't/ T)e "tu#y &i!%te# a 'e* #ia('%"tic t%%! 0SABER61$D t% a""e""

Si'(a&%re9" u'i%' a'#

*%r$%rce #eve!%&me't $%r t)ree time &eri%#"; +,-.5 +,,. a'# 2.+./ T)i" ca"e

i!!u"trate" t)e "tae)%!#er" a'#

&r%(re""ive #eve!%&me't %$ a "trate(ic *%r$%rce #eve!%&me't "y"tem i' a"ma!! city6"tate *it) a a c%%r#i'ate#

ra&i#!y c)a'(i'( ec%'%my t)at ")i$te# $r%m a #eve!%&i'( t% a#va'ce# ec%'%my

i' a'# "ervice #e!ivery/ T)e $i'#i'(" ")%* t)at Si'(a&%re )a" ma#e

c%'ti'u%u" &r%(re""

%' a!! #ime'"i%'"5 re&re"e'ti'( a )i()!y a#va'ce# "y"tem 3y 2.+. 3ut a!"%%'e t)at c%'ti'ue" t%

a#a&t a'# i''%vate '%'et)e!e""/

?ey re$%rm e!eme't" at t)e "trate(y !eve!

Ma


11/21

&%!icy5 im&!eme'tati%' a'# #e!ivery> #eve!%&me't %$ a

"y"tematic a&&r%ac) t% (at)eri'( a'#

u"i'( "i!!" #ema'# i'$%rmati%' t% i'$%rm &%!icy 0!ate

+,-." %'*ar#"> ear!y re$%rm %$ (e'era!

a'# tec)'ica! e#ucati%' 0+,-." a'# +,,." $%!!%*e# 3y

re$%rm %$ c%'ti'ui'( e#ucati%' a'#

trai'i'( $%r t)e *%r$%rce a" #ema'#" a'# &re""ure"

c)a'(e# 0+,:."62..."> a'# a care$u! $%cu"8Care$u! $%cu" %' (r%*i'( )uma' ca&ita! a'# "i!!" t% meet ra&i#!y

c)a'(i'( #ema'# *)i!"t a!"% mai'tai'i'( a

%' (r%*i'( "tr%'( $%cu" %' exce!!e'ce a'# 4ua!ity via re$%rm/ F%r

exam&!e5 re$%rm" u&(ra#e# tec)'ica!

e#ucati%' &r%vi"i%' 0+,-." a'# +,,."5 &articu!ar!y *it)

creati%' %$ t)e I'"titute %$ Tec)'ica!

)uma' ca&ita!

E#ucati%' 0ITE i' +,,2/ A!%'( *it) ma


12/21

F%!!%*i'( ma rece't e')a'ceme't %$ 4ua!i$icati%'" a'# re4uireme't" $%r

a#u!t e#ucat%r" "uc) a" t)e A#va'ce#

Certi$icate i' Trai'i'( a'# A""e""me't 0ACTA re!ate# t% 1%r$%rce Si!!"

ua!i$icati%'" 01S &r%(ram"/ T)e

re!eva'ce %$ trai'i'( )a" a!*ay" 3ee' %$ im&%rta'ce5 "u&&%rte# 3y

#eve!%&me't %$ c!%"e &art'er")i&" 3et*ee'

e#ucati%' a'# trai'i'( i'"tituti%'" a'# i'#u"try5 i'c!u#i'(; i'#u"try6

(%ver'me't &art'er")i&" !ie t)e %i't I'#u"try

Trai'i'( Sc)eme 0+,:."6+,,."> a'# c!%"e c%%&erati%' *it) em&!%yer" 3y t)e

ITE a'# P%!ytec)'ic" a" *e!! a" t)e

u'iver"itie"5 i'c!u#i'( $ee#i'( t)r%u() t% 'ati%'a! &%!icy a" )a" rece't!y%ccurre# i' t)e emer(i'( area %$ *ater

tec)'%!%(y/

Re$!ecti%'" %' !e""%'" $r%m Si'(a&%re

T)i" "tu#y )i()!i()t" )%* a "ma!! city6"tate )a" 3ee' a3!e t% mae

"trate(ic u"e %$ *%r$%rce #eve!%&me't i' %r#er t%

ac)ieve im&re""ive ec%'%mic (r%*t) a'# 'ece""ary re"tructuri'( %ver time/ A

'um3er %$ $act%r" )ave u'#er&i''e#

t)at "ucce""5 i'c!u#i'(; 'ati%'a! &%!icy a'# *%r$%rce #eve!%&me't ")a&e#

3y a "tr%'( vi"i%' $%r *)ere t)e c%u'try

'ee#e# t% (%> a &ra(matic5 "trate(ic a'# $%cu"e# a&&r%ac) t% *%r$%rce

#eve!%&me't> t)e tri&artite arra'(eme't )a"

&r%vi#e# t)e 3a"i" $%r a "ta3!e *%r$%rce5 $aci!itati'( attracti%' %$ ma


13/21

SYSTEMS APPROACH FOR BETTER EDUCATION RESULTS


14/21

I'tr%#ucti%'

Si'(a&%re &r%vi#e" a' exam&!e %$ a "ma!! 'ati%' i' 0+ Strate(ic

Frame*%r *)ic) re$er" t% t)e &raxi"

*)ic) *%r$%rce #eve!%&me't 01$D )a" 3ee' a %$ a#v%cacy5

&art'er")i&5 a'# c%%r#i'ati%' i' re!ati%'

&rimary c%m&%'e't %$ ec%'%mic #eve!%&me't $r%m t% t)e %3 %ver"i()t i" a3%ut (%ver'i'( t)e

i've"tme't5 "cie'ti$ic a'# tec)'ica! RD a'# e#ucati%' activitie" %$ a!!

"tae)%!#er" *it) a #irect i'tere"t i'

'%* mae a "i('i$ica't c%'tri3uti%' t% DP/ 1$D activitie">

a'# #e!ivery i" a3%ut ma'a(i'( t)e


15/21

Nevert)e!e""5 ma'u$acturi'( remai'" vita! t% t)e activitie" %$

t)%"e re"&%'"i3!e $%r trai'i'( &r%vi"i%'/

ec%'%my at t)i" "ta(e/ N%ta3!y5 t)ere i" rec%('iti%'

t)at &art" %$ t)e ec%'%my may #ec!i'e %r re!%cate i' T)e"e t)ree

Dime'"i%'" c%'"titute a c!%"e# &%!icy6

time/ T)e 1$D "y"tem i" &%"iti%'e# a" a vita! mai'( !%%& a'#5

*)e' tae' t%(et)er5 a!!%* $%r

mec)a'i"m5 a!%'( *it) &r%#uctivity5 tec)'%!%(y etc/5 a'a!y"i" %$ t)e$u'cti%'i'( %$ a 1$D "y"tem a" a *)%!e/

t% e'a3!e a &%"itive tra'"iti%' $%r *%rer" a'# t)e Eac) Fu'cti%'a!

Dime'"i%' i" c%m&%"e# %$ P%!icy

ec%'%my 0Lee5 2.+2/ %a!" 0"ee Fi(ure

2 "&a''i'( t)ree 3r%a# area";

(%ver'a'ce5

$i'a'ce a'# i'$%rmati%'/ Eac) %$ t)e

A Ne* Dia('%"tic T%%! P%!icy %a!" i"

i' tur' $urt)er #e$i'e# 3y t)ree ta'(i3!e

P%!icy Acti%'"5

mai'( a t%ta! %$ 'i'e P%!icy %a!" a'#

T)e t%%!5 '%*' a" SABER61$D5 i" a &r%#uct %$ t)e 2- P%!icy

Acti%'"/1%r!# Ba'9" i'itiative %' Sy"tem" A&&r%ac) $%r

Better E#ucati%' Re"u!t" 0SABER5 *)ic) $%cu"e" %' SABER61$D t%%!

u"e" t)e $%re(%i'( a'a!ytica!

"evera! &%!icy #%mai'"5 i'c!u#i'( *%r$%rce $rame*%r t%

create a "tructure# #ata c%!!ecti%'

#eve!%&me't 01$D/ + SABER61$D aim" t% #%cume't i'"trume't $%r

(at)eri'( i'$%rmati%' %' a c%u'try9"

a'# a""e"" a c%u'try9" &%!icie" a'# i'"tituti%'" i' !i()t &%!icie" a'#

i'"tituti%'" $%r 1$D/ F%r eac) %$ t)e 2-

%$ (!%3a! (%%# &ractice/ It $%cu"e" %' t)ree 3r%a# P%!icy Acti%'"5

t)e #ata c%!!ecti%' i'"trume't 0DCI

Fu'cti%'a! Dime'"i%'" %$ &%!icie"; &%"e" a "et %$

4ue"ti%'" re!ati'( t% t)e c%rre"&%'#i'(

a"&ect %$ t)e 1$D

"y"tem/ Eac) 4ue"ti%' i" a'"*ere#

3y c)%%"i'( $r%m

a !i"t %$ c!%"e# %&ti%'"

+F%r #etai!" %' SABER "ee

)tt&;***/*%r!#3a'/%r(e#ucati%'"a3er

c%rre"&%'#i'( t%

"ta(e" %$ #eve!%&me't/ T)e c)%ice i"

"u3"ta'tiate#

eit)er 3y #%cume'tary evi#e'ce %r 3y

SYSTEMS APPROACH FOR BETTER EDUCATION RESULTS

J


16/21

i'$%rmati%' "u&&!ie# a'# c%rr%3%rate# 3y i' #ata

c%!!ecti%'5 t)e SABER61$D "tu#y acce&t"

'%*!e#(ea3!e a'# cre#i3!e i'$%rma't" 0"ee B%x +/ revie*" a'#

eva!uati%'" %$ &%!icie" a'# re!ate# $%!!%*

A" i' t)e %t)er c%u'trie" "e!ecte# $%r t)i" &i!%t &)a"e5 u& acti%'"

a" evi#e'ce %$ im&!eme'tati%'/ Fi'a!!y5 t%

t)e c%!!ecti%' %$ #ata u"i'( t)e SABER61$D i'"trume't %3tai' t)e

"c%re" $%r t)e t)ree Fu'cti%'a! Dime'"i%'"*a" !e# 3y Pri'ci&a! I've"ti(at%r" 0PI" 2/ c%'"i#ere#

i' t)e SABER61$D $rame*%r5 t)e "c%re"

$%r t)e

P%!icy %a!" t)at re!ate t% eac) #ime'"i%' are

Fi(ure 2; A'a!ytica! Frame*%r %$ SABER61$D a((re(ate#

*it) e4ua! *ei()t"/ T)i" a!(%rit)m yie!#"

c%m&%"ite

"c%re" %' a +6 "ca!e $%r every !eve! %$

a((re(ati%'

i' t)e #ata> 'atura!!y5 t)e c%m&%"ite

"c%re" are

rare!y *)%!e 'um3er"/

Graham Allison

Some say Singapore's story is sui generis: Something that could only happen in that

time and place.

But its remarkable performance has less to do with miraculous conditions than with

Lee's model of disciplined, visionary leadership.

Leaders of other aspiring-to-develop nations, and even the U.S., should take pages from

Lee Kuan Yew's playbook to address current challenges.

'Grand Master's' lessons


17/21

We know many of Lee's lessons on the role of government leadership in development

because my co-authors and I asked him directly two years ago to reflect on them --

points we captured in our book,Lee Kuan Yew: The Grand Master's Insights on China,

the United States, and the World.

Five stand out.

First, Lee insisted that governance was first and foremost about results.

The political and economic legacy of Lee Kuan Yew 02:03

In his words, "the acid test of any legal system is not the greatness or the grandeur of its

ideal concepts, but whether, in fact, it is able to produce order and justice."

About the core purposes of government, he was crystal clear. In terms America's

founding fathers would recognize, he believed that "the ultimate test of the value of a

political system is whether it helps that society establish conditions which improve the

standard of living for the majority of its people, plus enabling the maximum of personal

freedoms compatible with the freedoms of others in society."

Moral leadership

Second, superior performance requires superior leadership.
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Lee demanded of leaders both intellectual and moral superiority. Contrary to modern

Western democratic theory that emphasizes citizens' participation in governance, his

views were closer to Plato's conception of the "guardians," or China's historical

Mandarins.

Good government requires most of all leaders who put the public good unquestionably

above their own personal interests.

He was disappointed by many of his counterparts who failed that test.

Equal opportunity

Third, successful societies guarantee strict equality of opportunity for all individuals, but

are realistic about the fact that this will yield substantial inequalities in outcomes.

For Lee, the essence of a successful society was intense competition on a level playing

field that allows each individual to achieve his or her maximum.

Lee Kuan Yew: Building a nation from the ground up 01:53

Few things offended him more than denial of equality of opportunity on the basis of caste

(India), class (Europe), race (the U.S. during segregation), sex, or other irrelevant

attributes.


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As he put it, the leader's objective was to "build up a society in which people will be

rewarded not according to the amount of property they own, but according to their active

contribution to society in physical or mental labor."

Discipline, not democracy

Fourth, about democracy, particularly Western liberal democracy, Lee had serious

reservations.

In part, this attitude stemmed from his own experience, but it also reflected a deeper

philosophical aversion to ideologies.

As he liked to say, "the acid test is performance, not promises.

The millions dispossessed in Asia care not and know not of theory. They want a better

life. They want a more equal, just society."

Lee enjoyed engaging American critics who insisted that without democracy Singapore

could not develop an advanced economy.

Lee Kuan Yew's legacy: A blueprint for China 03:53

In contrast, he argued that what most countries needed was more "discipline," rather

than democracy.


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He noted that the U.S. had been building democracy and giving aid to the Philippines for

over a century.

But, he asked, how many people from Singapore sought to leave it for the Philippines?

Many people in the Philippines, he noted, wanted to move to Singapore.

On one occasion, with a broad smile, he continued, "and you will notice that since the

Vietnam War and the Great Society, the U.S. system has not functioned even for the

United States."

Stability and strength

Fifth, which leaders did he most admire? From the recent past, he focused on three:

Charles de Gaulle, Deng Xiaoping, and Winston Churchill.

"De Gaulle, because he had tremendous guts; Deng, because he changed China from a

broken-backed state, which would have imploded like the Soviet Union, into what it is

today; and "Churchill, because any other person would have given up."

On the current scene, the leader who impressed him most was the new president of

China, Xi Jinping.

As he said just before Xi took office: "I would put him in Nelson Mandela's class of

persons. A person with enormous emotional stability who does not allow his personal

misfortunes or sufferings to affect his judgment. In a word, he is impressive."


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Singapore mourns death of founding father 04:04

As China's leaders attempt to follow in Lee's footsteps in building a Mandarin-Leninist

led nation that overtook the U.S. last year in GDP (measured by PPP) to become the

world's largest economy, and democratic India seems poised to grow at rates that will

compete with China, we can reflect on lessons from Lee Kuan Yew and place our bets.

Governing a nation in whichtwo of every three citizensbelieve their country is headed in

the wrong direction -- and have believed so under Democratic and Republican

Presidents for all of the 21st century -- American leaders should ask whether it is time to

focus on the acid test of performance rather than the litmus test of ideology
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