“Playing to Win: How Strategy Really Works” by A.G. Lafley and Roger Martin is regarded as somethin of a ‘go to’ book in the business strategy space. Lafley, the former CEO of Procter & Gamble (P&G), and Martin, provide a detailed framework for creating and sustaining competitive advantage. This book is not just theoretical; it’s grounded in practical applications and real-world examples, particularly from P&G’s transformation under Lafley’s leadership.
The Essence of Strategy
Strategy, according to Lafley and Martin, is about making specific, integrated choices to win in the marketplace. It is not about adopting best practices, optimizing processes, or setting lofty visions. Instead, it is about making deliberate choices that define where and how to compete. This approach is encapsulated in the “strategy choice cascade,” a framework that guides organisations through a series of interconnected decisions.
The Strategy Choice Cascade
The strategy choice cascade is a series of five critical questions that any organisation must answer to develop a winning strategy:
- What is your winning aspiration?
- Where will you play?
- How will you win?
- What capabilities must be in place?
- What management systems are required?
Each question builds on the previous one, creating a cohesive and integrated strategy.
- What is Your Winning Aspiration?
The first step in the strategy choice cascade is to define your winning aspiration. This is not just about setting a vision or mission statement; it is about articulating what winning looks like for your organisation. A winning aspiration provides a clear direction and purpose, guiding all subsequent strategic choices. For example, P&G’s winning aspiration under Lafley’s leadership was to “touch and improve more consumers’ lives in more parts of the world more completely.”
A winning aspiration should be ambitious yet achievable, inspiring the organisation to strive for excellence. It should also be customer-focused, emphasizing the value delivered to customers rather than internal metrics. This focus on the customer ensures that the organisation remains relevant and competitive in the marketplace.
- Where Will You Play?
The second question focuses on choosing the playing field. This involves defining the markets, customer segments, and geographies where you will compete. It is crucial to make deliberate choices about where to play, as trying to compete everywhere can lead to underperformance. For instance, P&G chose to focus on specific product categories and geographic markets where they could leverage their strengths and achieve significant growth.
Choosing where to play involves understanding the competitive landscape and identifying opportunities where the organisation can create a unique value proposition. This may involve entering new markets, targeting underserved customer segments, or focusing on specific product categories. The key is to make choices that align with the organisation’s strengths and strategic goals.
- How Will You Win?
Once you have defined where to play, the next step is to determine how you will win in those chosen areas. This involves identifying the unique value proposition that will set you apart from competitors. Winning strategies often involve a combination of cost leadership, differentiation, and focus. For P&G, winning meant leveraging their deep consumer insights and innovation capabilities to create superior products that met the needs of their target customers.
Winning requires a deep understanding of customer needs and preferences, as well as the ability to deliver value in a way that competitors cannot easily replicate. This may involve investing in research and development, building strong brand equity, or creating efficient supply chains. The goal is to create a sustainable competitive advantage that drives long-term success.
- What Capabilities Must Be in Place?
To execute the chosen strategy, organisations must develop and nurture specific capabilities. These are the skills, technologies, and processes that enable the organisation to deliver on its strategic choices. For P&G, this meant investing in consumer research, product innovation, and brand management capabilities. By building these capabilities, P&G was able to consistently deliver high-quality products that resonated with consumers.
Capabilities are the building blocks of strategy execution. They enable the organisation to deliver on its promises and achieve its strategic goals. Developing these capabilities requires investment in people, technology, and processes, as well as a commitment to continuous improvement. Organisations must also be willing to adapt and evolve their capabilities in response to changing market conditions.
- What Management Systems Are Required?
The final question in the strategy choice cascade is about establishing the management systems needed to support the strategy. This includes the processes, structures, and metrics that ensure the organisation stays on track and adapts to changing conditions. Effective management systems enable organisations to monitor performance, make data-driven decisions, and continuously improve. At P&G, Lafley implemented rigorous performance management systems to track progress and drive accountability.
Management systems provide the framework for executing the strategy and achieving the desired outcomes. They ensure that the business remains focused on its strategic goals and can respond effectively to challenges and opportunities. This involves setting clear performance metrics, establishing accountability, and fostering a culture of continuous improvement.
Case Studies & Examples
Throughout the book, Lafley and Martin provide numerous case studies and examples to illustrate the application of the strategy choice cascade. One notable example is the turnaround of P&G’s Olay brand. By redefining the brand’s winning aspiration, focusing on specific customer segments, and leveraging P&G’s innovation capabilities, Olay was transformed from a struggling brand into a market leader in the skincare industry.
Another example is P&G’s entry into the Chinese market. By carefully selecting the product categories and customer segments to target, and by leveraging their global capabilities in consumer research and product innovation, P&G was able to establish a strong presence in China and achieve significant growth.
How it helps
“Playing to Win” offers a practical and actionable framework for developing and executing winning strategies. By answering the five critical questions in the strategy choice cascade, organisations can make deliberate and integrated choices that drive competitive advantage. Lafley and Martin’s insights are not only applicable to large corporations like P&G but can also be adapted to fit the needs of Small & medium sized business, non-profits and public sector organisations.
In today’s dynamic business environment, having a clear and coherent strategy is more important than ever. While having strategy can never guarantee success, Lafley’s framework can help leaders to navigate this complexity and increase their chances of success.
