Strategy is an integral part of running an organisation. It’s often the make-or-break aspect of a company’s performance. Some strategies are only effective enough to keep a company afloat, while others send it soaring towards their goals. How can managers ascertain that they are developing a winning strategy, not just an effective one?
Playing to Win: How Strategy Really Works is a book by business professionals A.G. Lafley and Roger Martin. Lafley served as Procter & Gamble’s (P&G) CEO from the year 2000 up to 2009. Martin, on the other hand, is a consultant to several multinational corporations such as P&G, Lego, Ford, and more. The latter worked closely with Lafley during his stint as P&G’s CEO, developing innovative products for several brands and driving success for the organisation in the 2000s.
The book comes at a recommendation from Dr. Steve Nuttall, Research Director at Fifth Quadrant. According to Dr. Nuttall, the strategic advice in Playing to Win is crucial for fleet managers to read.
“This book is a must-read because it strips strategy back to its essentials and shows how to make deliberate, practical choices. Strategy is not just about what to do, but also about what not to do. The authors present a practical five-step framework: define your winning aspiration, decide where to play, choose how to win, build the right capabilities, and put in place the systems to support those choices. This as relevant to fleet management as it is to consumer goods or tech,” he explained.
Grab a notebook and pen, readers! It’s time to take notes on how to win the game instead of just playing.
THE BASIS OF A STRATEGY
The concept of a strategy, according to the book, is often misunderstood or misused by most CEOs. Strategies can be misunderstood as a vision, plan, or “the optimisation of the status quo.” Some CEOs may even believe that long-term strategies don’t work or that a strategy is merely complying with best practices. This leads CEOs to prioritise what is urgent over what truly matters and become reluctant “to make truly hard choices.”
The real definition is much simpler. Strategy, according to Lafley and Martin, is “an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to competition.”
To create an effective strategy, you must first ask five important questions:
- What is your winning aspiration? This is what motivates you or your company.
- Where will you “play” your strategy? Think of “where” you want to succeed and execute a strategy.
- How will you win the game based on where you’re playing?
- What capabilities will you need to support your strategy? Settle on the capabilities needed to achieve your goals based on your “how.”
- What management systems need to be in place for your strategy to run? These systems will maintain your strategy and future decisions.
(Lafley, A.G. and Martin, R.L., 2013)
These five fundamentals are the core of the entire book. Together, they work together as “an integrated cascade of choices” where they can occur at any level within an organisation. As the questions are integrated, each choice is connected to the other and inform the next answer or step.
Lafley and Martin clarified that for the first three questions, there may not be definitive correct answers, but it highly depends on the organisation and its circumstances at a given time. Given how circumstantial the answers can be, there’s no need to keep them static or locked into a different point in time. The answers to the integrated cascade can be changed and should be monitored over the course of time.
HOW NOT TO STRATEGISE
Strategies can differ but ultimately, not all can be effective. There are some common mistakes, according to the authors, that executives commonly make when they are forced to make decisions.
The first mistake is the refusal to make a choice and instead, try to cover all their bases in one go. The second mistake is trying to buy one’s way out of making an unfavourable decision. Lastly, the third mistake is to simply accept a choice that is unavoidable and cannot be changed.
Ultimately, organisations should be “playing to win,” as the title puts it, and not simply “playing to play.” The authors pointed out that the “play to play” perspective can only be effective for so long but diminishes in value in the long run. “Playing to win,” on the other hand, does not necessarily entail beating out the competition entirely. Winning, in this case, is about succeeding in a carefully chosen market, segment, or location and leaving space for competition to succeed in another area.
Some unsuccessful strategies listed by the authors include:
- The do-it-all strategy – This strategy attempts to cover all bases and solve all problems. There’s no obvious priority; thus, no concrete decisions are made. A strategy is made up of choices, so being unable to make one negates the strategy in the first place.
- The Don Quixote strategy – This entails competing with an already-established competitor with their own secure playing ground. Attacking strong competition, or “walled cities,” head-on may not be a viable option, especially since you have the choice of where to play your strategy. You can always opt for your own playing ground where your organisation will succeed on its own right.
- The dreams-that-never-come-true strategy – In this strategy, lofty goals and vague mission statements lead the way but are never actually realised with concrete plans. Core capabilities and management systems are essential to executing your winning strategy. More importantly, aspirations and strategy aren’t the same thing.
There are three more strategies specified by Lafley and Martin, but at the risk of spoiling the entire book, we’ll leave that to you to read up on!
OLAY AND THE CASCADE OF CHOICES
As Lafley and Martin worked closely together to develop P&G brands in the 2000s, it’s no surprise that the book is full of examples from the conglomerate’s application of their findings.
Taking the book’s core, the integrated cascade of choices, we can look at how these were applied to P&G’s skincare brand, Olay.
(The following questions and answers were lifted directly from Playing to Win: How Strategy Really Works by A.G. Lafley and Roger Martin.)
- What was Olay’s winning aspiration?
- Become a leading skin-care brand
- Help establish a key pillar in the P&G beauty-care business, along with hair care
- Win convincingly in our chosen channels and markets
- Where will we play?
- Move upmarket (in “masstige” channel) with existing mass retailers
- Target younger women in their 30s and 40s who are beginning to want and need anti-aging products
- Sell in major geographies (North America and UK)
- How will we win in chosen markets?
- Better anti-aging skin-care products
- Winning marketing campaign connected to consumer insights (“Fight the Seven Signs of Aging”)
- Establish a “masstige” segment to compete directly against prestige brands in department and specialty stores
- What capabilities must be in place to win?
- Leverage P&G’s capabilities to the company’s context in consumer understanding, brand building, innovation, going to market, and scale
- Partner to build full range of beauty, design, innovation, and marketing capabilities needed to win with consumers, channels, influencers
- What management systems are required?
- Leverage P&G systems
- Channel and partner systems
- “Love the job you’re in”
(Lafley, A.G. and Martin, R.L., 2013)
In Olay’s case, P&G repositioned the brand into the cosmetic market (where), focusing on a “masstige” market and an anti-aging niche (how). To create the masstige market, P&G leveraged their resources of suppliers (capabilities and systems) to establish partnerships for the home beauty niche. This enabled them to become a major player in the skincare industry. Results of this strategy showed that “Olay had double-digit sales and profit growth every year for the next decade, and turned into a USD 2.5 billion brand.”
PLAYING TO WIN IN FLEET?
The fleet industry may be vastly different from that of the skincare industry, but it doesn’t mean the lessons from Lafley and Martin’s book don’t apply. The book’s lessons apply to organisational thinking in general, especially for those keen on succeeding in their own unique way. In fact, according to Dr. Nuttall:
“Fleet managers are increasingly being asked to make choices about electrification, telematics, supplier mix, and sustainability targets with constrained budgets. Playing to Win shows that you cannot do everything. Success comes from making clear trade-offs, focusing investment on the right capabilities, and aligning systems to support those choices. This thinking helps leaders move away from incrementalism and design strategies that deliver competitive advantage for their organisation and the people they serve.”
With this in mind, Playing to Win can challenge fleet managers to be more decisive and adaptable. As the fleet industry is intertwined with technology and society, change is unavoidable. Fleet managers are challenged to not only be decisive, but adaptable as well.
Outside-the-box thinking is the crux of Playing to Win. We highly recommend this book to leaders who want a fresh perspective on “playing the game.”
As for those who are on the brink of picking it up, we ask this question: Do you lead to play the game, or do you lead to win?
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REFERENCES
Lafley, A. G., & Martin, R. L. (2013). Playing to Win: How Strategy Really Works. Harvard Business Review Press.
