Niall Crozier summarises AG Lafley and Roger Martin’s book Playing to Win, on how strategy really works. A longer version of this article is available here.

As Glyn Roberts, chief executive of Retail NI has said, “Our economy and the way we do business will be in a very different place when this crisis ends.” With the “Northern Ireland economy acutely exposed to coronavirus” a radical rethink of many firms’ strategies will be required.

If you’re looking for a crash course in strategic decision-making to assist with this process, reaching for Playing to Win could be a good option. Told through the lens of AG Lafley and Roger Martin’s journey to double P&G’s sales and quadruple its profits in the 2000s, Playing to Win is an explanation of what business strategy is and how it works.

At the book’s core is ‘the Strategic Choice Cascade’, a framework they demonstrate with case studies about brands such as Gillette, Pampers and Olay. For Lafley and Martin, strategy boils down to five interconnected, mutually reinforcing choices: not only choices about the enterprise’s aspirations, the arena in which it competes, and its approach to winning there, but the supporting capabilities the enterprise chooses to build and the systems it puts in place to enable these.

I don’t have time to read it — what are the book’s main messages?

Playing to Win articulates that:

  1. Strategy is what you choose to do in pursuit of winning. This involves actively not choosing certain options. If everything is a priority, nothing is. It also means that the strategy is what is done in practice; therefore the choices must hang together consistently and not just remain as theory.
  1. The first step is defining what constitutes ‘winning’. This is a vision of the organisation’s ‘why’ – its deepest purpose and ambition, and how this relates to the people it serves. It starts with people (consumers and customers) rather than money.
  1. Choosing ‘where to play’ identifies the geographies, industry segments, consumers, customers, product categories, occasions, parts of the value chain and so on in which the organisation will (and will not) compete. Before trying to ‘win the game’, these strategic choices ask ‘are we competing in the right one?’ Instead of trying to win multiple ‘games’, competing against all-comers to capture every customer, this is choosing the most attractive ones to the organisation, and focusing.
  1. Identifying ‘how to win’ involves uncovering the organisation’s sources of competitive advantage in the arena in which it has chosen to play. To ‘win’ is to provide a better consumer and customer ‘value equation’ than your competitors, by being the lowest cost player, or offering differentiated value. The choices made about how the whole organisation operates must be consistent with this
  1. ‘Where to play’ and ‘how to win’ choices require corresponding capabilities to support them, and make them happen on-the-ground. These are the range – and quality of – activities the organisation uses to create value. They are feasible, distinctive, and defendable from competition. 
  1. Capabilities are built and maintained by management systems. These include technology and metrics to gauge performance against the strategic choices over the short and long term, governance rhythms to continue strategic decision-making throughout the year, and communication methods to ensure choices are shared with clarity and simplicity. 

Playing to Win then outlines two techniques for helping make these choices:

  1. The Strategy Logic Flow provides a set of four (example) factors to analyse when weighing up ‘Where to Play and How to Win’ choices, and
  1. Reverse engineering generates a range of possible answers for a given choice, and then asks ‘What would have to be true?’ for a given possibility to be the ‘winner’. Any possibility which does not satisfy a small number of non-negotiable conditions would be immediately discounted.

Worth a read?

As “businesses in Northern Ireland are beginning to think about how to operate after the lockdown ends,“ Playing to Win may be as good a handbook as any for helping work through the difficult strategic decisions of the next few months.

On one hand, this is as good a strategy textbook as I’ve read. On the other, it does feel like a textbook at times!  

It’s written about a bygone era, a period before the massive upheaval of disruption in CPG manifested itself in earnest, a time when ‘winning’ was primarily about being the biggest brand. While therefore the stories have dated a bit, the underlying logic and value hasn’t. 

Equally ‘Winning’ isn’t language that is a natural fit for all sectors, but it’s worth persisting with, or transposing for your own context – the underlying principles themselves have wide applicability.

Where can I find out more about it?

If you’d like to learn more and apply this to your own career or business, there’s a full in-depth summary of Playing to Win here on The Business Anthology, a resources site for entrepreneurs. 

Where can I find more content like this?

If you’re keen to read more, you’re in luck. You can also check out other business review articles by Niall Crozier on Northern Slant:

Playing to Win by AG Lafley and Roger L Martin (2013) is published by Harvard Business Review Press. Further materials are available here.