Must-Read: "Playing To Win: How Strategy Really Works"

Let’s get this out of the way immediately: A.G. Lafley and Roger Martin’s recently released book–Playing To Win: How Strategy Really Works–is a must-read for anyone who claims to be about strategy and needs to grow their business.

If you’ve come through the classical CPG training ground that is Procter & Gamble, it may be old hat to you. However, for those of us who didn’t have that experience, I think you’ll find this book an eye-opener. Despite its 260-page length, it’s surprisingly simple.

But then again, Lafley (the former and now just-returned chairman and CEO of P&G) and Martin (the Dean of the Rotman School of Management at University of Toronto) know a thing or two about how strategy plays out in big, global companies. Lafley oversaw a decade-long run of P&G posting double-digit growth, as well as the successful acquisition of Gillette. Martin brings to bear years of C-suite consulting experience prior to his appointment at Rotman. So, hat tip here to Depeche Mode, but if you’re willing to learn, they’ve got something to teach.

Lafley makes the point that in order to effectively lead a global organization, ideas had to be whittled down to their clearest, simplest form. Therefore, when he and Martin talk about strategy, they mean that it is the answer to five interrelated questions:

What is your winning aspiration? The purpose of your enterprise, its motivating aspiration.
Where will you play? A playing field where you can achieve that aspiration.
How will you win? The way you will win on the chosen playing field.
What capabilities must be in place? The set and configuration of capabilities required to win in the chosen way.
What management systems are required? The systems and measures that enable the capabilities and support the choices.

Here’s what the above cascade looks like in its most basic form:

The authors also point out that these questions form a reinforcing cascade that can be applied at the corporate, group and business level.

The book goes onto break down each of these steps. Each are supported by examples from P&G’s brand portfolio. As well, Lafley and Martin, naturally, have access to current and former P&G executives who share their perspectives and recollections on the business challenges P&G faced, as well as the challenge of implementing this new strategic approach within a vast organization. So the value in this book is as much about this strategic process as it is about getting a sense of the massive culture change that needed to happen within P&G to make it happen. One comforting thought for all insurgent brands and companies: Even P&G wasn’t always killing the game.

Lafley (above, left) and Martin don’t just leave us with this strategy playbook without pulling it all together. The book ends with two important chapters: One on how to think through strategy, where they give a nod to Harvard strategy guru Michael Porter. And the other one is on what they call “shortening the odds”. By this, they mean increasing your chances of winning in the marketplace. You get here by asking the right questions so that everyone can agree on a path forward towards implementation. They suggest ways to avoid having team members fighting to defend their particular concepts of strategy, i.e., the “why this is true” argument that often erupts at the end of strategy meetings. Rather asking “what would have to be true for this possibility to be the winning choice” which the authors contend “enables the team to uncover the strongest option together.” They provide a seven-step process for this.

Finally, the book wraps up with two useful lists. The first is six ways to tell you’re in a strategy trap. The second is a list of six signs of a winning strategy. Give these some thought:

An activity system that looks different from any competitor’s system. You’re deliver value distinctively
Customers who absolutely adore you, and non-customers who can’t see why anybody would buy from you. Congrats! You’ve been choiceful.
Competitors who make a good profit doing what they are doing. They don’t need to attack your market to survive.
More resources to spend on an ongoing basis that competitors. The means you’re making good margin and have ability to spend to take advantage of opportunity or defend your turf
Competitors who attack one another, but not you. You look like the hardest target in the industry to attack.
Customers who look first to you for innovations, new products, and service enhancements. You’re uniquely positioned to create value for them.

Here’s the thing: We’re all so caught up in the hows: of social media; of new tech like mobile apps and Google Glass; of how to make viral content. But efforts like these, even if successful, only provide short-term gains if they’re not based on a solid and distinctive approach to strategy.

That’s what this book provides.

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