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Playing to Win : How Strategy Really Works A.G. Lafley and Roger L. Martin HBR Press - FEB 2013 A Book Review By Marutish Varanasi Market strategy consultant E-mail: firstname.lastname@example.org
About the authorsOne more strategy book is out in the market. But this book is the one which will be likedfrom strategy consultants , business leaders to business school students because it hasmade “Strategy” simple and without Jargon through real life examples and practicalinsights. It’s more do-it-yourself book for managers and leaders who find strategyintimidating.From a practitioner perspective the book is very balanced. It has the balance of realworld successful implementation of strategy in a corporate setting backed by theacademic rigor and consulting background of the authors.The book provides• insights on how the strategy was implemented at P&G with insights of the authorsformer Procter & Gamble CEO Lafley• along with how strategy works from consulting and academic experience of RogerMartin’s work at Monitor and who is currently the dean of Rotman School ofManagement.
Strategy is all about winningThe authors assert that the essence of strategy is about winning and to achievesuccess leaders and organizations need to make tough choices. The authors provideframeworks which are simple, basic and practical. The pose and ask questions thatseparate true strategy from mission, vision, or planning.They say that a winning strategy comes from deeply substantive hard thinking, andThe authors provide real life examples from P&G on how the strategy has beenimplemented over a period. The books talks about how P&G developed or positionedits well-known brands in the global market.
Strategy is a set of TacticsThe authors argue that Strategy is a set of tactics. Winning through distinctive choicesshould be always-and-forever job of the top management in a company. Ifmanagement continues to search for unique where-to-play and how-to-win choicesthat set the company apart, they should be able to further the success of thecompany. These two decisions — in what areas will the company compete, and onwhat basis will it do so — are the critical one-two punch to generate strategicadvantage. According to the authors these two decisions, cant be consideredindependently or sequentially. In a great strategy, your where-to-play and how-to-winchoices fit together and reinforce one another.But the good news is that if we change the way we think about the problem ofstrategy versus execution, we can change the outcome.
What really matters is winningThe authors explain that many leaders tend to approach strategy in one of the followingineffective ways:(1) define strategy as a vision,(2) define strategy as a plan,(3) deny that long-term (or even medium-term) strategy is possible,(4) define strategy as the optimization of the status quo, or(5) define strategy as following best practices.The authors argue that what really matters is winning, and in book they provide fivechoices, a framework, and a process, for what is needed to win. The authors rightlyargue that a set of good choices positions a firm for competitive advantage. The saythat choice must be sufficiently compelling to generate management commitment tothe choice in an engaged and energitic way.
Strategy = choiceThe authors believe strategy can be defined and created using a simple framework thatentails answering five questions — the same five questions, no matter the type, size orcontext of the organization. Lafley and Martin are blunt about what strategy is:"Strategy = choice." Its a set of choices on five issues: the businesss winning aspiration;where to play; how to win; needed capabilities; needed management systems. Its a setof hard choices on five issues:The businesss winning aspiration; What are company’s aspiration/goals in the shortterm, medium and long term of the company?Where to play; In which markets does the company want to focus on? In which market’sit doesn’t want to be in ?How to win; How has the company planned its strategy?Needed capabilities; Does it have the capabilities, resources and management systemsfor executing its strategy? The capabilities include deep consumer understanding,Innovation, Brand building, Go-to-market ability and ability to scale.Needed management systems. How they have been successful in executing theirmilestones?
Reinforcing choice cascadeThe five strategy questions and the relationship between them have been presented bythe authors in a framework as a reinforcing ‘choice cascade’ where the choices at thetop of the cascade setting the context for those below, and choices at the bottominfluencing and refining the choices above.The authors argue that making the way through the choice cascade isn’t a one-way,linear process. Rather they say that, strategy is an iterative process in which all of themoving parts influence one another and should be taken into account together.The authors argue that Strategy as a Choice Cascade model is a better approach than thecurrently favourite mainstream strategy-execution approach. In the strategy andexecution approach development of strategy and execution are in two different silos andthe success of both strategy and execution together cannot be vouched for.In the Choice Cascade model those at the top of the company make the broader, moreabstract choices involving larger, long-term investments, whereas the employees towardthe bottom make more concrete, day-to-day decisions that directly influence customerservice and satisfaction. This approach the authors feel is better than the strategy-execution model.
Challenge for organizations - Choice Cascade model – Indian contextThe book poses a serious challenge for organizations who feel that by answering thefive strategy questions they have mastered strategy making process. In reality thetoughest part is to understand the interplay between all the moving parts of thereinforcing ‘choice cascade’ and set their strategy looking at the big picture. In theIndian context, where the boss is always right and is look up to and not to questionedimplementing the choice cascade model will not be easy as bosses micro-manage thechoices and decisions of even their sub-ordinate staff.
Strategy = choice - Few Indian examplesI will quote few relevant examples from the Indian context :Where to play : Rajiv Bajaj of Bajaj Motors choice of focus on “Motor Cycles” and notentering the scooter market in India. This has led to the company’s high EBIDTAmargins compared to the competition.In short, where to play represents the set of choices that narrow the competitive fieldand Bajaj has been very clear in its choice.How to win : Unique value proposition and competitive advantage of Cognizant –“Three in a box” framework.This framework has helped the company outperform the fierce competition in theglobal IT services market.Needed capabilities : Tata Nano’s had a innovative product in the Indian PassengerCar market. Tata Motors failed to answer the following questions. Who is thecustomer for the product ? What is its positioning in the market ? How will theproduct be delivered ?.Tata motors failed in executing its strategy – because of issues related to marketingand distribution. In fact in it is a failure of not understanding the interplay between allthe moving parts of the reinforcing ‘choice cascade’ at the organization .
Structuring strategic choicesThe authors also provide a process and a framework for structuring strategic choicesincluding strategic logic flow framework and reverse engineering the current strategy.The authors indicate that support staff provide the top management with key data andinformation - results, past experience, etc. Members of the top management teamthen select key facts from the pool of available data and apply logic to that data inorder to draw the inferences necessary to make a choice.The goal of a choice-structuring process is to produce sound strategic choices that leadto successful action. They define the attributes of a high quality choices and presentthe "strategic logic flow" framework, designed to direct thinking to the key analysesthat forms any strategy.In the “reverse engineering" methodology, the organization implementing the strategywill analyze the conditions that represent the greatest barriers first, so that otherconditions will not have to be explored if the prior barrier is not overcome.
Final wordThe authors have provided a framework for organizations which looks simple. Butmaking choices are not and success is not easy. Choices call for commitmentwhich is not easy in an business environment which is sluggish. Also managementneed to make up choices based on real data and not on hunch. The book providesa framework for making informed and successful strategic choices in anorganization and the book is a good read for practitioners, academicians, industryand students.