A short summary of the renowned book Playing to Win, from AG Lafley & Roger Martin.
This bestseller book is viewed by many as the holy grail of business strategy, especially if you've spent any time through the ranks of P&G. It outlines the strategic approach the company took in the early 2000s when AG Lafley was the CEO, and that led to stellar business results - double P&Gs sales, quadruple its profits and increased the market value by more than $100 billion.
In its essence strategy = choice. In fact, a set of integrated cascading choices.
1. WHAT IS YOUR WINNING ASPIRATION?
“Single most crucial dimension in the guidance aspiration is to win. A company must play to win vs. play to participate.”
"Start with people (consumers and customers) rather than money (stock price).”
“P&G Homecare business aspiration is not have the most powerful cleanser or most effective bleach. It is to reinvent cleaning experiences, taking the hard work out of the household chores. It is an aspiration that leads to market-shifting products like Swiffer, the Mr. Clean Magic Eraser, and Febreze."
2. WHERE TO PLAY? (WTP)
Geographies, Consumer Segments, Product Categories, Channels, etc.…
3. HOW TO WIN? (HTW)
"Our value proposition (benefit/price) and our points of difference, hence what is hard for our competitors to copy.” (Brand Growth Model – e.g.: superior product, innovation, packaging, route-to-market, distribution, trial platform,) communication, sales fundamentals, production (cost structure), effective reach/targeting, etc…)
"Because contexts, like competitive dynamics and company capabilities, differ greatly, there is no single, simple taxonomy of how-to-win choices. At a higher level, the choice is whether to be the low-cost player or a differentiator”.
4. CAPABILITIES
"Play to your strengths (…) the goal then (…) is a set of capabilities that underpin the WTP and HTW choices and that are feasible, distinctive, and defensible”.
E.g.1: HTW: Product superiority --> Capabilities: Connect + Develop (P&G’s version of open innovation), design, globally distributed R&D.
E.g.2: HTW: Superior trial program for Pampers --> Capabilities: Dedicated PR department to strengthen relationship with Ministry of health, hospitals and nurses.
These can be different from business unit to business unit, “…however, if there is nothing in common between these different activity systems, it is a sign that the organization has businesses that may fit poorly in the same portfolio.”
5. MANAGEMENT SYSTEMS
Systems, structures and measures to communicate the strategy from top to bottom.
E.g.: Strategy Review Meetings, VP quarterly letter to CEO, OGSM deployment, Performance Reviews, CEO webcast.
“AG’s 3 themes that would enable the company to win across the different segments businesses: 1. Making the consumer the boss, 2. Win the consumer value equation, 3. Win the two most important moments of truth.”
Additionally, throughout this whole process, the most important question to assess strategic options without any bias is: ‘What needs to be true?’.
“In a standard strategy discussion, skeptics attack ideas as vigorously as possible to knock options out of contention, and defenders parry the arguments to protect pet options. (…) If instead the dialogues is about what would have to be true, then the skeptic can say, ‘For me to be confident in this possibility, we would have to know that consumers would respond in the following way’ .This is a very deferment sort of statement than ‘That option will never work!’.”
Playing to Win was first published in 2013 by Harvard Business Review Press, and is currently available in hard copy, digital and audio format. In case you would like something more visual, you can watch this 70 minute interview with the authors.
댓글