.

Operational Effectiveness Is Not Strategy

According to Porter, various management tools like total quality management,
benchmarking, time-based competition, outsourcing, partnering, reengineering, that
are used today, do enhance and dramatically improve the operational effectiveness of
a company but fail to provide the company with sustainable profitability. Thus, the
root cause of the problem seems to be failure of management to distinguish between
operational effectiveness and strategy: Management tools have taken the place of
strategy.
Operational Effectiveness: Necessary but Not Sufficient
Although both operational effectiveness and strategy are necessary for the superior
performance of an organization, they operate in different ways.
Operational Effectiveness (OE): Performing similar activities better than rivals
perform them.
OE includes but is not limited to efficiency. It refers to many practices that allow a
company to better utilize its inputs.
Strategy: Performing different activities from rivals or performing similar activities
in different ways.

Moreover, Porter states that a company can outperform rivals only if it can establish a
difference it can preserve. It must deliver greater value to customers or create
comparable value at a lower cost, or do both. However, Porter argues that most
companies today compete on the basis of operational effectiveness. This concept of
OE competition is illustrated via the productivity frontier, depicted in the figure
above.
The productivity frontier is the sum of all existing best practices at any given time or
the maximum value that a company can create at a given cost, using the best available
technologies, skills, management techniques, and purchased inputs. Thus, when a
company improves its operational effectiveness, it moves toward the frontier. The
frontier is constantly shifting outward as new technologies and management
approaches are developed and as new inputs become available. To keep up with the
continuous shifts in the productivity frontier, managers have adopted techniques like
continuous improvement, empowerment, learning organization, etc. Although
companies improve on multiple dimensions of performance at the same time as they
move toward the frontier, most of them fail to compete successfully on the basis of
operational effectiveness over an extended period. The reason for this being that
competitors are quickly able to imitate best practices like management techniques,
new technologies, input improvements, etc. Thus, OE competition shifts the frontier
outward and effectively raises the bar for everyone. But such competition only
produces absolute improvement in operational effectiveness and no relative
improvement for anyone.
"Competition based on operational effectiveness alone is mutually destructive, leading
to wars of attrition that can be arrested only limiting competition" (p. 64). Such OE
competition can be witnessed in Japanese companies, which started the global
revolution in operational effectiveness in the 1970s and 1980s. However, now
companies (including the Japanese) competing solely on operational effectiveness are
facing diminishing returns, zero-sum competition, static or declining prices, and
pressures on costs that compromise companies ability to invest in the business for the
long term.
II. Strategy Rests on Unique Activities
"Competitive strategy is about being different. It means deliberately choosing a
different set of activities to deliver a unique mix of value" (p. 64). Moreover, the
essence of strategy, according to Porter, is choosing to perform activities differently
than rivals do. Strategy is the creation of a unique and valuable position, involving a
different set of activities.
The Origins of Strategic Positions
Strategic positions emerge from three sources, which are not mutually exclusive and
often overlap.
1. Variety-based positioning: Produce a subset of an industrys products or services. It
is based on the choice of product or service varieties rather than customer segments.
Thus, for most customers, this type of positioning will only meet a subset of their
needs. It is economically feasibly only when a company can best produce particular
products or services using distinctive sets of activities.
2. Needs-based positioning: Serves most or all the needs of a particular group of
customers. It is based on targeting a segment of customers. It arises when there are a
group of customers with differing needs, and when a tailored set of activities can
serve those needs best.
3. Access-based positioning: Segmenting customers who are accessible in different
ways. Although their needs are similar to those of other customers, the best
configuration of activities to reach them is different. Access can be a function of
customer geography or customer scale or of anything that requires a different set of
activities to reach customers in the best way.
Whatever the basis-variety, needs, access, or some combination of the three-
positioning requires a tailored set of activities because it is always a function of
differences in activities (or differences on the supply side). Positioning, moreover, is
not always a function of difference on the demand (or customer) side. For instance,
variety and access positionings do not rely on any customer differences.
III. A Sustainable Strategic Position Requires Trade-offs
According to Porter, a sustainable advantage cannot be guaranteed by simply
choosing a unique position, as competitors will imitate a valuable position in one of
the two following ways:
1. A competitor can choose to reposition itself to match the superior performer.
2. A competitor can seek to match the benefits of a successful position while
maintaining its existing position (known as straddling).
Thus, in order for a strategic position to be sustainable there must be trade-offs with
other positions. "A trade-off means that more of one thing necessitates less of
another" (p. 68). Trade-offs occur when activities are incompatible and arise for three
reasons:
1. A company known for delivering one kind of value may lack credibility and
confuse customers or undermine its own reputation by delivering another kind of
value or attempting to deliver two inconsistent things at the same time.
2. Trade-offs arise from activities themselves. Different positions require different
product configurations, different equipment, different employee behavior, different
skills, and different management systems. In general, value is destroyed if an
activity is over designed or under designed.
3. Trade-offs arise from limits on internal coordination and control. By choosing to
compete in one way and not the other, management is making its organizational
priorities clear. In contrast, companies that try to be all things to all customers,
often risk confusion amongst its employees, who then attempt to make day-to-day
operating decisions without a clear framework.
Moreover, trade-offs create the need for choice and protect against repositioners and
straddlers. Thus, strategy can also be defined as making trade-offs in competing. The
essence of strategy is choosing what not the do.
IV. Fit Drives Both Competitive Advantage and Sustainability
Positioning choices determine not only which activities a company will perform and
how it will configure individual activities but also how activities relate to one another.
While operational effectiveness focuses on individual activities, strategy concentrates
on combining activities.
"Fit locks out imitators by creating a chain that is as strong as its strongest link" (p.
70). Fit, as per Porter, is the central component of competitive advantage because
discrete activities often affect one another.
Although fit among activities is generic and applies to many companies, the most
valuable fit is strategy-specific because it enhances a positions uniqueness and
amplifies trade-offs. There are three types of fit, which are not mutually exclusive:
1. First-order fit: Simple consistency between each activity (function) and the overall
strategy. Consistency ensures that the competitive advantages of activities cumulate
and do not erode or cancel themselves out. Further, consistency makes it easier to
communicate the strategy to customers, employees, and shareholders, and
improves implementation through single-mindedness in the corporation.
2. Second-order fit: Occurs when activities are reinforcing.
3. Third-order fit: Goes beyond activity reinforcement to what Porter refers to as
optimization of effort. Coordination and information exchange across activities to
eliminate redundancy and minimize wasted effort are the most basic types of effort
optimization.
In all three types of fit, the whole matters more than any individual part. Competitive
advantage stems from the activities of the entire system. The fit among activities
substantially reduces cost or increases differentiation. Moreover, according to Porter,
companies should think in terms of themes that pervade many activities (i.e., low cost)
instead of specifying individual strengths, core competencies or critical resources, as
strengths cut across many functions, and one strength blends into others.
Fit and Sustainability
Strategic fit is fundamental not only to competitive advantage but also to the
sustainability of that advantage because it is harder for a competitor to match an array
of interlocked activities than it is merely to replicate an individual activity. Thus,
"positions built on systems of activities are far more sustainable than those built on
individual activities" (p. 73). The more a companys positioning rests on activity
systems with second- and third-order fit, the more sustainable its advantage will be.
Such systems are difficult to untangle and imitate even if the competitors are able to
identify the interconnections. Further, a competitor benefits very little by imitating
only a few activities within the whole system. Thus, achieving fit is an arduous task as
it means integrating decisions and actions across many independent subunits.
Additionally, fit among activities creates pressures and incentives to improve
operational effectiveness, which makes imitation even harder. Fit means that poor
performance in one activity will degrade the performance in others, so that
weaknesses are exposed and more prone to get attention. On the other hand,
improvements in one activity will "pay dividends in others" (p. 74).
Strategic positions should have a horizon of a decade or more, not of a single planning
cycle, as continuity promotes improvements in individual activities and the fit across
activities, allowing an organization to build unique capabilities and skills custom-
fitted to its strategy. Continuity also reinforces a companys identity. Frequent shifts
in strategy are not only costly but inevitably leads to hedged activity configurations,
inconsistencies across functions, and organizational dissonance.
Thus, strategy can also be defined as creating fit among a companys activities as the
success of a strategy depends on doing many things well - not just a few - and
integrating among them. If there is no fit among activities, there is no distinctive
strategy and little sustainability.
Alternate Views of Strategy*
The I mplicit Strategy Model of the Past
Decade
Sustainable Competitive Advantage
One ideal competitive
position in the industry
Unique competitive position
for the company
Benchmarking of all
activities and achieving best
practice
Activities tailored to strategy
Aggressive outsourcing and
partnering to gain
efficiencies
Clear trade-offs and choices
vis--vis competitors
Advantages rest on a few
key success factors, critical
resources, core
competencies
Competitive advantage
arises from fit across
activities
Flexibility and rapid
responses to all competitive
and market changes
Sustainability comes from
the activity system, not the
parts
Operational effectiveness a
given
* Adapted from p. 74
V. Rediscovering Strategy
Failure to Choose
According to Porter, although external changes can pose a threat to a companys
strategy, a greater threat to strategy often comes from within the company. "A sound
strategy is undermined by a misguided view of competition, by organizational
failures, and, especially, by the desire to grow" (p. 75). Moreover, the fundamental
problem lies in the "best-practice" mentality of the managers, who believe in making
no trade-offs, incessantly pursuing operational effectiveness, and imitating
competitors to catch up in the race for operational effectiveness. Thus, managers
simply do not understand the need to have a strategy.
The Growth Trap
"Among all other influences, the desire to grow has perhaps the most perverse effect
on strategy" (p. 75). Companies often grow by extending their product lines, adding
new features, imitating competitors popular services, matching processes, and
making acquisitions. However, most companies start with a unique strategic position
involving clear trade-offs. Nevertheless, with the passage of time and the pressures of
growth, companies are led to make compromises, which were at first, almost
imperceptible. Thus, through a succession of incremental changes, which seemed
sensible at the time, companies have compromised their way to homogeneity with
their rivals. Compromises and inconsistencies in the pursuit of growth eventually
erode the competitive advantage of a company and their uniqueness. Rivals continue
to match each other until desperation breaks this vicious cycle, and results in a merger
or downsizing to the original positioning.
According to Porter, efforts to grow blur uniqueness, create compromises, reduce fit,
and ultimately undermine competitive advantage.
Profitable Growth
One approach to persevering growth and reinforcing strategy is to concentrate on
deepening a strategic position rather than broadening and compromising it. A
company can do so by leveraging the existing activity system by offering features or
services that rivals would find impossible or costly to match on a stand-alone basis.
Thus, deepening a position means making the companys activities more distinctive,
strengthening fit, and communicating strategy better to those customers who value it.
But currently many companies attempt to grow by adding hot features, products, or
services without adapting them to their strategy.
Globalization often allows growth that is consistent with a companys strategy, as it
opens larger markets for a focused strategy. Thus, expanding globally is more likely
to reinforce a companys unique position than broadening domestically.
The Role of Leadership
"The challenge of developing or reestablishing a clear strategy is often primarily an
organizational one and depends on leadership" (p. 77). Moreover, strong leaders, who
are willing to make choices, are essential. General management should do more than
just stewardship of individual functions. They should define and communicate the
core companys unique position, make trade-offs, and forge fit among the various
activities of the company. Further, the leader should decide which changes in the
industry and customer demands, is the company going to respond to. The leader
should be able to teach others in the organization about strategyand to say no.
Strategy is about choosing what to do as well as what not to do. Deciding which
target group of customers, varieties, and needs the company should serve is
fundamental to developing a strategy. Strategy is also however, in deciding not to
serve other customers or needs and not to offer certain features or services. Thus,
strategy requires continuous discipline and clear communication. Strategy should
guide employees in making choices that arise because of trade-offs in their individual
activities and in day-to-day decisions.
Moreover, managers need to understand that operational effectiveness, although a
necessary part of management, is not strategy. Managers should be able to clearly
distinguish between the two.
Conclusion
"Strategic continuity does not imply a static view of competition. A company must
continually improve its operational effectiveness and actively try to shift the
productivity frontier; at the same time, there needs to be ongoing effort to extend its
uniqueness while strengthening the fit among its activities" (p. 78).
However, a company may have to change its strategic position due to a major
structural change in the industry. A company should choose its new position
depending on its ability to find new trade-offs and leverage a new system of
complementary activities into a sustainable advantage.


What does the auto industry bailout say about the
strategy of the Big Three?
Submitted by Robert Heller on Wed, 2009-01-14 13:39.
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The amazing sight of Americas Big Three car bosses before Congress,
begging for money cap-in-hand, drives in some harsh conclusions about
the US and its industrial strength.


Make no mistake. The humiliation of General Motors, Ford and Chrysler is not just
another event in the unfolding of the Credit Crunch. It marks the end of a long hill
down which the Big Three auto leaders have been rolling, with little pause, for
several decades.
Big Three itself gives a graphic illustration of how the mighty are fallen. Today,
they are not so big. After World War II the trio ruled the domestic market, facing no
competition at all until Volkswagen achieved big US success with the Beetle.
The 400,000 or so Beetles sold each year were dismissed as a fad by Detroits
moguls, who had no intention of sacrificing the mighty profit margins made by the
so-called gas-guzzlers.
Readers will recognise the syndrome. The rational way of reacting to new,
unwelcome competition is to analyse the enemys strengths, to reappraise the
whole market, and to form a plan that will protect your existing sales while
widening your coverage to exploit the new trends. Instead, companies instinctively
and irrationally favour denial.
The profit motive which animates capitalism is supposed to provide driving force.
Competing bosses whip their troops along towards stretching targets, while the
outside investors whip lagging CEOs or sit back and reward the successes with
bags of gold. The trouble with this method, taken for granted across the Western
world, is that it simply may not work.
CEOs have turned their backs on the future and placed their faith in the old ways
that have failed so conspicuously.
Thats a remarkable and far from promising strategy when you consider that
Toyotas market capitalisation is over 50 times the puny GM figure of $1.8 billion.
The key strength of the Japanese firm is its ability to combine flexibility with strict
control, moving to meet the market and staying in tune with the customer. GM,
however, is still locked psychologically in the formula of its heyday.
The Congressional hearings on the Big Three auto giants and their pleas for bail-
outs demonstrated the absurdity. The three CEOs turned up in separate corporate
jets, with no documents or plans, giving the committee a field day. Would the trio
accept a cut in pay to $1 a year? The Ford man reckoned that his massive $22
million was just about right.
Overpaid colossally, professionally incompetent, immensely conceited. Thats no
way to run a car company or the world economy.


Errors in company strategy are often self-inflicted.
A singular focus on shareholder value is the "Bermuda Triangle" of strategy, according
to Michael E. Porter, director of Harvard's Institute for Strategy and Competitiveness.
This was one of the takeaways from a recent talk by Porter titled "Why Do Good
Managers Set Bad Strategies?" offered as part of Whartons SEI Center Distinguished
Lecture Series.
During his remarks, Porter stressed that managers get into trouble when they attempt to
compete head-on with other companies. No one wins that kind of struggle, he said.
Instead, managers need to develop a clear strategy around their company's unique
place in the market.
Porter's core field is competition and company strategy. He is generally recognized as
the father of the modern strategy field, and his ideas are taught in virtually every
business school in the world. He has also re-defined thinking about competitiveness,
economic development, environmental policy, and the role of corporations in society.
When Porter started out studying strategy, he believed most strategic errors were
caused by external factors, such as consumer trends or technological change. "But I
have come to the realization after 25 to 30 years that many, if not most, strategic errors
come from within. The company does it to itself."

Destructive Competition
Bad strategy often stems from the way managers think about competition, Porter noted.
Many companies set out to be the best in their industry, and then the best in every
aspect of business, from marketing to supply chain to product development. The
problem with that way of thinking is there is no best company in any industry. "What is
the best car?" he asked. "It depends on who is using it. It depends on what it's being
used for. It depends on the budget." Managers who think there is one best company
and one best set of processes set themselves up for destructive competition. "The worst
error is to compete with your competition on the same things," Porter said. "That only
leads to escalation, which leads to lower prices or higher costs unless the competitor is
inept." Companies should strive to be unique, he added. Managers should be asking
"how can you deliver a unique value to meet an important set of needs for an important
set of customers?"
Another mistake managers make is relying on a flawed definition of strategy, said
Porter. "Strategy is a word that gets used in so many ways with so many meanings that
it can end up being meaningless." Often corporate executives will confuse strategy with
aspiration. For example, a company that proclaims its strategy is to become a
technological leader or to consolidate the industry has not described a strategy, but a
goal. "Strategy has to do with what will make you unique," Porter noted. Companies
also make the mistake of confusing strategy with an action, such as a merger or
outsourcing. "Is that a strategy? No. It doesn't tell what unique position you will occupy."
A company's definition of strategy is important, he said, because it predefines choices
that will shape decisions and actions the company takes. Vision statements and mission
statements should not be confused with strategy. Companies may spend months
negotiating every word, and the results may be valuable as a corporate statement of
purpose, but they do not substitute for strategy.
In the last 10 years or so, Porter added, companies have become increasingly confused
about corporate goals. The only goal that makes sense is for companies to earn a
superior return on invested capital because that is the only goal that aligns with
economic value.
Recently, companies have developed "flaky metrics of profitability," he said, pointing to
amortization of good will as an example. Some of these measures began as a way for
managers to stay a step ahead of the demands of Wall Street. "What starts as a game
for capital markets then starts to confuse the managers themselves. They [then] make
decisions that are not based on fundamental economics."
Porter said the "Bermuda Triangle of strategy" is confusion over economic performance
and shareholder value. "We have had this horrendous decade where people thought the
goal of a company is shareholder value. Shareholder value is a result. Shareholder
value comes from creating superior economic performance."
To think that stock price on any one day, or at any one minute, is an accurate reflection
of true economic value is dangerous, he noted. Research shows companies can be
undervalued for years. Conversely, during the Internet bubble, managers whose
motivation and compensation were tied to stock price began to believe and act as if the
share price determined the value of the company. Managers are now beginning to
understand the goal of their companies is to create superior economic performance that
will be reflected in financial results and eventually the stock price. "We know there's a
lag and it's ugly. But it's important that a good manager understands what the real goal
is not spend time pleasing the shareholders."
Corporate strategy cannot be done without strong quantitative analysis, said Porter,
adding that each year students take his strategy course thinking they will have at least
one class in which they don't have to worry about numbers. Not true. "Any good
strategy choice makes the connection between the income and the balance sheet."
Right Time, Right Price
Companies hoping to build a successful strategy need to define the right industry and
the right products and services. Bad strategy often flows from a bad definition of the
business, said Porter.
He pointed to Sysco Corp., the number-one foodservice supplier in North America.
Defining Sysco simply as a food distribution firm would eventually lead to a failed
strategy. The industry is actually two distinct sectors. One delivers food to small
restaurants and institutions that need help with finance and product selection. The other
has large, fast food franchise customers, like McDonald's, that are not interested in any
additional services. McDonald's just wants industrial-size containers delivered on time at
the best price. Sysco has developed two separate strategies for its two customers.
"It is important for everyone in the organization to understand the strategy and
align everything they do with that strategy every day."
Geographic focus is another type of business definition that can trip up strategy. Porter
gave the example of a U.S. lawn care company that developed a plan to grow through
international expansion. The business, however, was not suited to operating on a global
scale. The products were bulky and expensive to ship, and the company had to deal
with different retail channels in different regions.
One more mistake managers make is confusing operational effectiveness with strategy.
Operational effectiveness is, in essence, extending best practices. Good operations can
drive performance, Porter said, but added: "The trouble with that is it's hard to sustain. If
it's a best practice, everybody will do it, too." None of this is easy, he conceded. "The
real challenge of management is you have to do these things together at the same time.
You have to keep up with best practices while solidifying, clarifying and enhancing your
unique positions."
Managers often tend to let incremental improvements in operations crowd out the larger
strategy of building a unique business that will retain its competitive advantage, Porter
noted. To bypass this problem, managers must keep the competitive strategy in mind at
all times. "Every day, every meeting, every decision, has to be clear.... Is this an
operational best practice or is this something that's improving on my strategic
distinction?"
He went on to describe key principles of strategic positioning, including a unique value
proposition, a tailored value chain, clear tradeoffs in choosing what not to do, and
strategic continuation, or ongoing improvement. The underpinnings of strategy are
"activities that fit together and reinvigorate each other."
Enterprise Rent-A-Car is an example of a company that stumbled onto its strategy more
or less by luck, according to Porter. The company started as an auto-leasing firm, but
customers frequently asked if they could rent cars for short periods. The rental car
industry was completely geared toward travellers, with pick-ups at airports and a price
structure suited to expense accounts or vacationers willing to splurge. It is difficult to
sustain the kind of strategic advantage Enterprise enjoys without a patent, Porter
pointed out. Hertz has tried to connect with this business but remains geared toward the
traveller and cannot compete with Enterprise in its specific market.
Porter stressed that continuity is critical to successful strategy. "If you don't do it often,
it's not strategy," said Porter. "If you don't pursue a direction for two or three years, it's
meaningless." Many companies start out with a good strategy, but then grow their way
into failure, Porter continued. Research shows that among companies that fade in ten
years, many enjoyed phenomenal growth in the beginning, but then put growth ahead of
sticking to their strategy.
Dividends are one way to avoid the pressure to boost stock price with rapid growth,
Porter said. Dividends also return capital to all investors, not just short-term investors
who benefit from trading on gains in share price.
Leadership and Strategy
Porter cited some capital market biases that result in barriers to strategy. First, Wall
Street tends to create pressure for companies to emulate their peers. Analysts often
anoint a star performer in each industry, which encourages others to follow that
company's game plan. Again, this leads to the no-win approach of companies
competing on the same dimensions, not on unique strategies.
Analysts also tend to choose metrics that are not necessarily aligned with true value or
meaningful for all strategies, said Porter, noting that analysts apply pressure to grow
fast and have a strong bias toward deals, which lead to a quick bump in the stock early
on. Managers are made to feel like "Neanderthals" if they resist mergers and
acquisitions or other financial market tactics, he added. "What happened in a lot of
companies was that the equity compensation was [tied to share price] and people
became crazed and very attentive to these biases. All the corporate scandals came
from pressure to do things that were stupid."
Other barriers to strategy include industry conventional wisdom; labour agreements or
regulations that constrain choice; inappropriate cost allocation to products or services,
and rapid turnover of leadership. Increasingly, Porter is struck by how important
leadership is to strategy. "Strategy is not something that is done in a bottom-up
consensus process. The companies with really good strategy almost universally have a
very strong CEO, somebody who is not afraid to lead, to make choices, to make
decisions." Strategy is challenged every day, and only a strong leader can remain on
course when confronted with well-intentioned ideas that would deviate from the
company's strategy. "You need a leader with a lot of confidence, a lot of conviction and
a leader who is really good at communication."
Years ago, corporate strategy was considered a secret known only by top executives for
fear competitors might use the information to their advantage, said Porter. Now it is
important for everyone in the organization to understand the strategy and align
everything they do with that strategy every day. Openness and clarity even help when
coping with competition. "It's good for a competitor to know what the strategy is. The
chances are better that the competitor will find something else to be unique at, instead
of creating a zero-sum competition."
July 2009.


Ten wasted years: UN drug strategy a failure, reveals damning report
Buzz up!
Digg it
Duncan Campbell
The Guardian, Wednesday 11 March 2009
Article history
The UN strategy on drugs over the past decade has been a failure, a European commission report
claimed yesterday on the eve of the international conference in Vienna that will set future policy
for the next 10 years.
The report came amid growing dissent among delegates arriving at the meeting to finalise a UN
declaration of intent.
Referring to the UN's existing strategy, the authors declared that they had found "no evidence
that the global drug problem was reduced". They wrote: "Broadly speaking, the situation has
improved a little in some of the richer countries while for others it worsened, and for some it
worsened sharply and substantially, among them a few large developing or transitional
countries."
The policy had merely shifted the problem geographically, they said. "Production and trafficking
controls only redistributed activities. Enforcement against local markets failed in most
countries."
Representatives from governments are split in their efforts to formulate an international drugs
policy for the next decade. The UN Commission on Narcotic Drugs is due to formulate a strategy
over the next two days, but there is widespread disagreement among delegates and a general
feeling that an opportunity for a united approach has been lost.
In an article for the Guardian, Mike Trace, chairman of the International Drug Policy
Consortium, says: "We're about to see the international community walk up the political and
diplomatic path of least resistance. It will do nothing to help the millions of people around the
world whose lives are destroyed by drug markets and drug use. And the depressing thing about it
is that we can all book our seats for 2019, to go through this charade again."
Antonio Maria Costa, executive director of the UN Office on Drugs and Crime, has defended the
approach. He is due to talk today on organised crime, which he has described as "one of the
unintended consequences of drug control". He will warn that "a criminal market, of staggering
proportion, risks undermining drug control" and outline a three-pronged approach to tackling
drug-related crime.
In London, however, Lady Meacher, speaking on behalf of more than 30 members of the Lords,
warned that the existing hardline prohibitionist strategy, which has been led by the US, had been
deeply damaging. It was now being challenged by politicians, scientists and lawyers around the
world, she said.
"We are concerned that the war on drugs has failed and the harm it has caused is far greater,"
said Meacher, at a briefing organised by the drugs advice charity Release. "What we want the
UN to do is accept that the previous declaration was hopelessly unrealistic."
She said that Barack Obama had yet to appoint a new drugs tsar in the US but there were already
signs that he was adopting a more liberal approach to the issue. The US president has lifted the
ban on federal funding for needle exchange programmes, which are seen as crucial in the
struggle to combat the spread of HIV.Kasia Malinowska-Sempruch, director of the global drug
policy programme at the Open Society Institute, Warsaw, said: "It is now clear that after months
of negotiations, millions of people around the world will continue to suffer needlessly. Thanks to
the global 'war on drugs' over the past decade, close to 2 million people living in the former
Soviet Union are infected with HIV, half a million US citizens languish in prison for non-violent,
drug-related crimes, and billions of dollars are spent on destructive military actions in Colombia
while the production of cocaine continues to rise."
The first two days of the session will be held at ministerial level to assess progress made in the
decade since a special session of the UN general assembly set the target of a "drugs-free" world.
The aim has been criticised for not addressing the problems of addiction and treatment.
Prof Tim Rhodes, of the London School of Hygiene and Tropical Health, said the number of
injecting drug users around the world could have reached 15 million and this was responsible for
10% of global HIV infections.
Rhodes said the problem was particularly serious in Russia, where intensive street-level policing
had exacerbated the difficulties.